The Wenatchee Valley Mall - December, 2007 Acquisition

On December 13, 2007, Vintage Real Estate acquired the Wenatchee Valley Mall in Wenatchee, located in North Central Washington State. The 340,000 square foot regional mall is anchored by Sears, Macy’s, Ross, Bed Bath & Beyond, and Food Pavilion (a regional supermarket chain). The Wenatchee Valley Mall is the only regional indoor mall within a 120 mile radius, and services over 200,000 residents in the Chelan, Douglas, and Okanogan Tri-County trade area. Wenatchee emerged from an agricultural community that has transformed into a diverse and rapidly expanding city.

Wenatchee’s economic growth stems from recent migration to the picturesque city and surrounding region by a wide range of companies, including technology firms, such as Microsoft, Symantec, and Yahoo. Service providers and retailers have also seen a sharp increase in growth as West Coast residents continue to demonstrate a strong preference for Wenatchee’s affordable cost of living and rich natural amenities. The city’s workforce has shifted to 19% agriculture from over 40% in 1997. Both USA Today and The Seattle Times reported that of the 287 metro areas studied, Wenatchee led the entire nation in home value appreciation for the 12-month period ending June 2007 with a 23.54% increase.

Wenatchee’s recent growth has generated a consumer base that will assuredly attract a long list of national retailers not yet in the market. Although the mall benefits from a central location with strong national anchors, it is currently under-serving the customer within the marketplace. As of February 2008, Vintage Real Estate has received 60,000 square feet of LOIs from national tenants to lease the mall’s 30,000 square feet of vacant or temporarily leased space.

Vintage Real Estate’s President, Brenton Watson was recently quoted as saying, “The Wenatchee Valley Mall fits perfectly within our business model of acquiring ‘value-add’, well-located regional malls and shopping centers with high growth potential.” This acquisition will provide positive initial returns based on the strength of current income. Additionally, we see an exciting opportunity to add significant value by leveraging our relationships with national retailers and improving the overall retail mix at the mall.

Hamilton Crossings – July 2007 Acquisition

In July 2007, Vintage Real Estate purchased Hamilton Crossings, a 201,770 square foot Kmart anchored shopping center located on Route 4 (Erie Highway) in Hamilton, Ohio. Route 4 is the main thoroughfare connecting Hamilton, a city of 61,000 residents, to Cincinnati, which has a trade area of 2.1 million residents. Hamilton Crossings is anchored by Kmart (92,000 SF), Marsh Supermarkets (45,000 SF), and Steve & Barry’s (22,000 SF). Kmart and Marsh have been long-time anchors-- Steve & Barry’s just signed a 7-year lease. Vintage believes that Steve & Barry’s will serve as a catalyst to spur leasing activity throughout the center.

Vintage purchased the property with 48,000 square feet of vacancy and quickly leased-up 30,000 square feet within the initial six months. Upon purchase, Vintage immediately completed significant renovations and hired Continental Retail Property Services out of Columbus to oversee property management. Vintage also hired Grubb & Ellis, based in Cincinnati, to work in concert with its own national leasing team.

The center is now in excellent condition, with a new parking lot, new pylon signage, fresh paint, new lighting, a newly installed outdoor music system, new outdoor furniture and trash receptacles, and an attractive brick façade with floor-to-ceiling glass storefronts. The center’s appearance was also recently enhanced with new landscaping and a carwash was demolished, as well as overgrown trees removed, which obstructed the center’s visibility. All improvements were completed by Vintage Real Estate from July –December 2007.

Steve & Barry’s: In January of 2008, Steve & Barry’s agreed to occupy 22,000 square feet at Hamilton Crossings. Steve & Barry’s believe that Hamilton’s dense, middle class demographics and prime retail location will work well for its popular discount apparel concept that has been catching fire nationwide. Steve & Barry’s is a destination retailer that has teamed-up with celebrities, such as Sarah Jessica Parker, Stephon Marbury, and Venus Williams to sell fashion and athletic apparel for under $20 per item. Steve & Barry’s have had positive experiences in similar Ohio submarkets and is expected to significantly increase foot traffic at the center, particularly from the 9,000 students at the nearby Miami University Hamilton.

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