By Bob Shallit
Published: Friday, Jun. 7, 2013 – 12:00 am | Page 6B
The region’s most active buyer of distressed commercial property has acquired another trophy: the century-old Nimbus Village center in Rancho Cordova.
Investor Ethan Conrad this week paid about $6 million for the 87,000-square-foot center – formerly called Nimbus Winery – at Highway 50 and Hazel Avenue. It joins about 80 other buildings he’s bought at deeply discounted prices during the economic downturn and through the beginnings of a recovery.
Conrad, chief executive of Ethan Conrad Properties, said his immediate plan is to address some deferred maintenance at the center, which opened around 1913 as an olive oil production facility surrounded by vineyards. It was remodeled and converted to retail uses in the 1970s.
“On a scale of 1 to 10, it’s a 5 or 6 now,” Conrad said of the center’s condition, adding that he intends to make it “an 8 or 9.”
Part of that plan could involve adding a bowling center, Conrad said.
That kind of business would be a “perfect tenant,” he said, adding to the family appeal of a center that already has a glow-in-the-dark indoor mini golf operation, the Old Spaghetti Factory, Cattlemens restaurant, Tommy T’s comedy club and a specialty toy store among other retailers.
On many weekday evenings and on weekends, the center brings in “boatloads of families,” Conrad said.
He said the operators of Cattlemens and Old Spaghetti Factory were both “ecstatic” about the possible addition of a bowling center and the planned improvements.
The center’s previous owner – Lakha Properties – bought it in 2005 for $11.7 million. Retail Opportunity Investments Corp. of San Diego acquired the note for the property in late 2010 and then took it over when Lakha defaulted on its loan, said Ryan Forsyth, a senior associate with Cornish & Carey Commercial Newmark Knight Frank, who represented ROIC in the sale to Conrad.
ROIC put the center up for sale several months ago while holding on to the much larger Mills Center in Rancho Cordova that also was formerly owned by Lakha.
Forsyth said the Nimbus site should be “a great property long term” for Conrad, citing plans for a project being readied nearby by the Easton Development subsidiary of GenCorp.
“You’re going to have homes and commercial (buildings) just a Tiger Woods drive away,” he said.
Conrad has made a name – and a fortune – acquiring “fixer” properties with relatively highvacancy rates but great potential. In all, he owns about 80 commercial buildings and other properties with a total value he has estimated at close to $300 million.
Among his more notable acquisitions: the former Breuners building off of Interstate 80, the Plaza de Oro shopping center in Rancho Cordova and the former Affymetrix manufacturing plant in West Sacramento.
Nimbus Village is probably Conrad’s highest-profile deal, involving what he called a “landmark property in terms of people recognizing it.”
Though well-known and with a couple of highly successful tenants, Nimbus still offers the same sort of “value added” attractions of most of his other purchases, Conrad said, with a significant vacancy rate and opportunities for big cosmetic improvements.
Conrad has been funding many of his recent acquisitions by selling off home lots he acquired during the housing bust.
That was the case this time as well, with the simultaneous closing on Wednesday afternoon of the Nimbus purchase and Conrad’s sale of 54 finished home lots at the Sienna subdivision in southSacramento County to local home builder JMC Co.
The lots, at Elk Grove/Florin Road and Calvine Road, were among about 900 that Conrad bought from Ryland Homes when it pulled out of the Sacramento market in 2007.
JMC outbid “a bunch of different builders” for the Sienna home sites, paying roughly $90,000 per lot Conrad said – about four times what he paid for them six years ago.
“That’s a pretty good pop,” Conrad said of his return on the investment.