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We look at projects not for what they are, but for what they can be. The heart and soul of our organization is to enhance and maximize the value of each property under our control with persistence and uncompromising integrity.
This tired, 119,264 square foot grocery-anchored center in an infill blue-collar neighborhood was acquired in 2001 from an institution at a high cap rate because the anchor tenant, Fry’s Food & Drug, only had 1 ½ years remaining on their lease prior to the purchase. Through a relationship with Fry’s, it was determined that they wanted to remain at the site if certain improvements were made. Arizona Partners went to work to remodel the site and simultaneously work out a long-term lease extension with Fry’s whereby they would also remodel their store.
Several new retailers like Panda Express, GameStop, and Dollar Tree were brought to the site. Eventually, Fry’s wanted to add gas to the site, so additional terms were added to the Fry’s lease and Fry’s made a further investment in the center.
The 93,000 square foot, well-known specialty retail center was purchased in 2012 for $13,000,000 with a joint venture partner, AV Homes. The 30-year-old center was in an excellent location serving the upper-end market of Paradise Valley and Scottsdale, but suffered from high vacancy due to a dysfunctional design and obsolescence.
The purchase was made with a vision to convert the back half of the center – the obsolete portion – into multifamily. Arizona Partners began negotiating with the 50,000 square feet of existing tenancy to relocate them, or to buy them out of their leases, and the partnership put a very qualified team together to begin its rezoning process.
Within 12 months, Arizona Partners had reached agreement with all of the tenants to leave, and the rezoning was approved to allow for 240 high-end units and to allow the front half to operate as a separate commercial parcel. With the rezoning complete, the partnership split the project into two parcels with AV Homes taking the multifamily portion and Arizona Partners taking the front commercial portion, which was comprised of two highly coveted restaurant buildings.
Arizona Partners then made improvements to the commercial portion to add parking, enhance the fascia and add square footage. In addition, we replaced one of the restaurant tenants with a nationally recognized restaurant operator and increased the rent on that building significantly. Upon completion, Arizona Partners refinanced the center, thereby pulling out all of the equity and creating a good long-term cash flow.
This 277,000sf Neighborhood grocery/theater anchored center was purchased in October 2011 for $50,320,000. Although the center was in an excellent location it had been operated by the family that built it in the late ’70s who were not sophisticated in shopping center operations or management.
Since the purchase, AZP has improved the center in a number of areas thereby substantially increasing the NOI. We renegotiated with Safeway to add 20 years to the current lease, expand their store an additional 10,000sf, as well as give them the ability to add a gas pad. We removed an old vacant Restaurant/Bar and have added a McDonald’s drive-thru pad. Also, we renegotiated the theater lease to add 12 years to the lease term and increase the rent by 40%
A new color scheme and updated sign package were used to update the center and give it a fresh new look. Several non-credit tenants have been replaced with credit tenants such as Hallmark, Jimmy John’s, GNC, Sports Clips, and Jason Deli. Many restaurants in the center near the theater have above average per square foot sales which we wanted to capitalize on, so by creating a restaurant district and adding additional patio space and other restaurants we have seen an even bigger increase in their sales and traffic to the center. AZP has had a 90% success rate in the renewal of leases at the center at or above the current leasing rates. This Neighborhood Market / Entertainment Center will be sold in the spring of 2014 at a leveraged IRR of 25%
Surprise Marketplace a 186,000sf multi-tenant entertainment center was purchased in May 2011 as a note from the lender and subsequently was foreclosed by Karlin Real estate group. It was a product of the great recession
When the center was purchased it had many challenges, including a seriously delinquent movie theater and a 50% completed bowling alley that was being built on spec by the original developer. It was approximately 70% vacant with many suites that were not built out.
AZP was able to negotiate a reinstatement of the Ultra Star theater lease, to bring the tenant current and extend their lease. Thru a national marketing effort, we were able to find an operator out of the east coast to purchase the 60,000sf Bowling Alley, Uptown Alley, who finished the build-out of the space and whose success has exceeded their projections. We also brought in several national and regional tenants including Beef O’Brady’s sports bar, Cold Stone Creamery, State Farm, and Rocket Fizz.
Through the restructuring of existing tenants and the lease-up of the center in 2012, only one year’s time, Karlin was able to sell the center for a $7 million dollar profit yielding a leveraged IRR of 37.3%
North Main Plaza, formerly known as Butterfield Stage Square, was acquired by AZP in 2000 for $10,500,000. At purchase, it was a tired, run-down 220,000 square foot shopping center built in the late 1960s. Anchored by Mervyn’s, the center was located in a redevelopment zone in an area that was a major focus to the City of Corona, California.
AZP negotiated an incremental sales and property tax agreement with the City and began work on redevelopment plans and re-tenanting. The center was given a completely modernized look with new facias, parking lot, signage, and tenancies and reopened in 2003. A healthy mix of apparel and restaurant tenants, as well as national tenants like Walgreens, Ross, the Avenue, Sally Beauty, and Jack in the Box, were brought to the site which significantly increased traffic and gross sale tax revenue. The final results were a healthy, functional center that coincided with the City’s redevelopment of the streetscape. At the end of 2004, the center was refinanced returning all equity invested plus an above-average 30% return on equity invested for AZP and its partnership while retaining ownership of the center.
Pure Fitness was a 70,000 sq. ft. retail center in a great location on 8.5 acres in Tempe, AZ. The Note was in foreclosure and up for auction on Auction.com. AZP acquired the Note in the summer of 2011 for approximately $4 million and immediately commenced to complete the foreclosure.
Plan A for the project was to empty out the center and sell it as multifamily land. Plan B would have been to renovate and re-tenant. After the foreclosure, Plan A was chosen. AZP went to work to empty out the center of its approximately 10 tenants and began marketing the land to several apartment developers. One of the tenants was a credit tenant with a long-term lease who had vacated the property. AZP was able to negotiate a buyout whereby the tenant paid $1.5 million to terminate the lease. The land was placed in escrow with a high-profile apartment developer within 3 months of Note purchase, subject to zoning, for $8.5 million. The zoning was achieved and AZP closed on the land sale 367 days after its foreclosure of the Note. (It was set up that way to qualify…)
Arizona Partners acquired this 1960s-era retail center in 2015 and executed a major redevelopment. Through significant capital investment and leasing, this underperforming property was transformed into a vibrant community destination featuring popular local establishments including new restaurant tenants Angry Crab and Tipsy Cactus.
Arizona Partners acquired this 160,000 SF distressed asset out of foreclosure in 2015 and executed a transformative redevelopment. The project included full façade reconstruction and the strategic subdivision of a former 85,000 SF Kmart. Through targeted leasing efforts, the center is now anchored by Planet Fitness, Petco, Hobby Lobby, Ross, and a strong mix of national, regional, and local tenants—achieving 100% occupancy and helping to revitalize the surrounding trade area.
Dobson Ranch was a strategic addition to the Arizona Partners portfolio in Mesa, acquired through the divestment of the Taco Bell PAD at Plaza de Fiesta. This 16,000 SF retail strip is ideally positioned at the SEC of Dobson and Baseline, shadow-anchored by a separately owned Albertsons with immediate access to the Loop 101.
Following years of decline and occupancy dropping to 40%, Arizona Partners executed a major revitalization plan involving significant capital expenditures and deferred maintenance repairs. These improvements successfully stabilized the asset, attracting high-quality tenants like Dr. Kelly’s Vet Surgical Unit and AT&T. Today, the shops are nearly at full capacity, with only a single remaining vacancy.
Arizona Partners purchased 60% vacant Encanto Village right before the Covid pandemic in 2020. Encanto Village is a 19,000 SF retail center that was one of the first strip centers built in Midtown Phoenix in the 1960’s. Arizona Partners dedicated significant capital to modernize and improve the functionality of all aspects of the property – cleaning up spaces, renovating the exterior, and the shared courtyard. Despite many challenges, the leasing team reinvigorated the center – bringing in 5 new local restaurant and retail concepts – including neighborhood favorite the Dinersaur, joining the iconic Original Hamburgerworks. AZP made Encanto Village a destination spot for surrounding neighborhoods before selling it in 2022 to work on the next project. Community feedback: “This place is and always has been great! Even after all these years, it maintains its quality, service and atmosphere! Great place for families to take out of town visitors for a tase of ‘old’ Phoenix.”
Arizona Partners successfully revitalized a 50% occupied, underperforming retail center in the Deer Valley neighborhood of North Phoenix through a comprehensive renovation. A new Sprouts Farmers Market was secured as the anchor tenant, complemented by the ground-up development of a Habit Burger to go next to an existing Starbucks outparcel. Several national and regional tenants were added, including 5 restaurants such as First Watch. These strategic improvements attracted a strong mix of national and local retailers, reestablishing the center as a vibrant and sought-after neighborhood shopping destination.
Developed in 2016, this prime corner location at 2nd Street and Scottsdale Road featured a 6,500 SF shell building and an undeveloped adjacent lot. Arizona Partners renovated the existing structure and constructed a new restaurant building on the vacant parcel, creating an integrated dining and retail destination. The property now houses an F45 Training and four successful local restaurant concepts – Sizzle Korean BBQ, award-winning sushi restaurant ShinBay, JOJO Coffeehouse, Sweet Republic and serves as a cornerstone of Old Town Scottsdale’s renowned dining and entertainment district. Community feedback via Google Reviews: “Loved JOJO Coffeehouse! There’s a reason the line is always out the door—we got on the waitlist early and were seated pretty quickly. “Perfect start to our day! Great atmosphere. Feels like a sunny beach porch, right in the middle of the desert.”
For over 25 years, Arizona Partners has specialized in the strategic redevelopment of retail properties across the Southwest and Midwest. Our experienced, hands-on approach directly enhances asset performance, generating significant, above-average returns for our investment partners.
We view challenges in the retail sector not as uncertainty, but as opportunities for innovation and growth. For those equipped to create tangible solutions, the yields remain high. As Warren Buffett famously noted, ‘Risk comes from not knowing what you’re doing.’ Partnering with Arizona Partners limits risk by leveraging decades of proven expertise to capture emerging opportunities.