Value-adding at Tri-Land
Tri-Land Properties is demonstrating the power of value added retail real estate investing with its extensive renovation of Fridley Market at the intersection of University Avenue and I-694 in Fridley, Minn.
Tri-Land is a full-service, real estate development and redevelopment company focused on the successful acquisition, development, renovation and management of community centers ranging in size from 100,000 sq. ft. to 750,000 sq. ft.
The company specializes in identifying distressed and undervalued properties and transforming them into dynamic commercial centers that generate steady consumer traffic and produce returns for investors.
The $21 million renovation of the 20-acre, 164,847-sq.-ft. Fridley Market community center is improving the center’s buildings, infrastructure, lighting, sidewalks and parking lot, while adding new buildings.
“What we’ve done is much more than a cosmetic facelift,” said Richard Dube, Tri-Land’s president. “This renovation has virtually reinvented Fridley Market as a retail destination. The site has excellent fundamentals. Cub Foods is a great anchor tenant. The surrounding area has a solid demographic profile, and the accessibility and visibility are outstanding.”
When Tri-Land acquired the shopping center in 2006, it was 73% leased.
The demographics suggested that the site could do much better. The population within the three-mile ring is about 97,000. Average annual household income is over $73,000.
The traffic count along I-694 is 141,000 cars per day. University Avenue counts another 37,000 cars per day. A new passenger rail stop is just two blocks away.
Tri-Land’s repositioning plan identified six goals:
• Downsize anchor Cub Foods, the region’s dominant grocer, from 104,000 sq. ft. to 65,000 sq. ft. Cub bore the expensive of the remodeling, the most extensive in the supermarket’s history.
• Construct a new liquor store for longtime tenant Fridley Liquor, also at Cub’s expense.
• Construct two new 10,000-sq.-ft. out-lot buildings facing the new Cub Foods store.
• Add 60,000 sq. ft. junior anchor space to the space vacated by Cub.
• Renovate common areas to a new shopping center quality environment.
• Construct up to 30,000 sq. ft. of retail or hotel space on a southern outparcel that abuts I-694.
New tenants include Great Clips, a new free standing McDonald’s and a 15,000-sq.-ft. restaurant anchor, Teppanyaki Grill.
Overall sq. ft. has increased from 164,837 to 184,279.
Tri-Land is currently planning the final phase of the redevelopment: the construction of 30,000 sq. ft. of additional retail space or a limited service hotel — which has already been approved — on the southern 2.5-acre outparcel.
Tri-Land estimates that when the entire redevelopment has been completed, the internal rate of return will reach 20%.