Marketplace at the Lakes
West Covina, California
In September 2020, Arch Anchor, in an acquisition with Waterford Property Company and a prominent family office investor, acquired the Marketplace at the Lakes, a 100,000 RSF power center located in the East San Gabriel Valley submarket of West Covina, CA.
The timing of the acquisition occurred notably during the height of the COVID-19 pandemic in the Summer of 2020. The property had been in escrow three previous times in the 12 months prior, but no previous buyer was able to perform given market instability along with difficult debt financing due to the pandemic, along with the property’s 20%+ vacancy, and a challenging rent roll with both the upcoming lease expiration of one of its anchor tenants and very long lease term of another anchor tenant.
The Arch Anchor and Waterford led ownership group quickly underwrote, performed due diligence, and closed on the property in less than 45 days, during which time they recognized two attractive business plans.
The property is located within a specific plan in the City of West Covina that allows for a multi-family residential redevelopment, or the property could be leased and stabilized as long-term cash flowing retail asset.
Immediately after closing, the ownership group dual-tracked both business plans to provide ultimate optionality. While doing so they were able to both renew both the existing tenant with the near-term expiration, as well as completely lease the remaining vacancy to a well-regarded publicly traded retailer to a long-term lease. This allowed the ownership group to completely stabilize the asset and put attractive permanent financing, returning nearly 50% of ownership’s original investment via that refinance.
Marketplace at Lakes will continue to be held by the ownership group as a long-term asset within its collective real estate portfolio, providing extremely stable and predictable income while also maintaining a possibility of redevelopment in the future.
TYPE: Retail Shopping Center
LOCATION: 940 The Lakes, West Covina, CA
SIZE: 100,000 RSF
ACQUISITION PRICE: $18.6M
STATUS: Active Investment
