Real estate investor Ethan Conrad bought a North Highlands shopping center, which was believed to be at risk of defaulting in a loan, for about $10 million.
Conrad closed escrow Thursday on the shopping center at 7453-7517 Watt Ave.
“We’re confident that we’ll significantly increase the occupancy relatively quickly because of the fact that we now have a strong supermarket in the Center, which occurred only about four months ago,” Conrad said in an email.
The 121,618-square-foot center is at the corner of Watt and Antelope Road, with thousands of homes surrounding it. But commercial loan tracking firm Trepp Inc. identified potential trouble for the center last September, when the loan for the property was transferred for special servicing. At the time, the anchor Food Source location was set to be closed.
However, Save Mart acquired the Food Source store and moved a FoodMaxx location there from farther south on Watt Avenue. Conrad, who is well-known for buying properties in distressed or below-market value, said the turnover helped him because the lender was pressuring the borrower to make a deal.
Current occupancy in the center is about 80 percent, though FoodMaxx is taking about half the square footage.
Conrad said he paid about $80 per square foot for the property, when “normally a center like this would sell for usually over $150.00 per square foot.”
Conrad said the property will be lightly remodeled and new attention will be paid to its leasing. In addition to Food Maxx, Carl’s Jr, Hibachi Grill & Buffet and Aaron’s are other prominent tenants in the center.
Ben van der Meer covers real estate, development, construction, water issues and the business of sports.