Hubbell closes Polk County’s second multitenant shopping center deal in ’09
Cedar Ridge Shopping Center has been sold to a local investor in a $1.65 million deal that closed on June 1. CB Richard Ellis/Hubbell Commercial’s Rick Krause and Jan Berg advised REO-Cedar Ridge LP in the sale of the property at 7501 Douglas Ave. in Urbandale, which, according to Berg, is only the second multitenant neighborhood shopping center to be sold in Polk County this year.
“The pendulum has swung from easy credit to tougher underwriting standards,” Krause said. “With the reduction in capital available to investors, it is more difficult to complete these types of transactions.”
“We felt like it was a good time to make an investment,” said Forrest Ridgway, owner of Ridgway Properties LLC, the property’s buyer. Ridgway, who owns Bike World and a few other rental properties in Greater Des Moines, said he sees a lot of potential for Cedar Ridge, which was about 70 percent leased at the time of the sale. Ridgway has already signed a new tenant and has two others that are close to signing. Within 60 days, he expects the 46,215-square-foot shopping center to be at 85 percent capacity.
A reasonable interest rate and “good upside potential” induced Ridgway to make the acquisition, which was financed by Freedom Financial Bank, he said.
In 2007, according to Krause, there were 19 multitenant neighborhood shopping center transactions, totaling more than $50 million. In 2008, that number dropped to nine, with a total value of more than $27 million. The downward trend, which Krause said illustrates the reduction in velocity in Central Iowa’s income-property market, is expected to continue, at least through the end of the year.
“Deals are coming together, but at a slower rate,” he said.