Turnberry Associates - Commercial Real Estate Case Study - Cushman & Wakefield

Sale of Tower Shops Exceeds Client Expectations


Photo not available
Click to enlarge

The Challenge

The main challenge was to unlock embedded value in this 372,000- square-foot community shopping center with current contract rents that were substantially below market. A second challenge was to obtain value for an 80,000-square-foot phase-two development opportunity.


The Solution

The marketing team positioned the asset as a "best-in-class" community shopping center within South Florida based on its extensive line up of top-tier big-box retailers, sizeable and affluent customer base, central location, immediate freeway accessibility, and strong anchor-tenant sales. We presented investors with a financial model projecting rental rates to increase to market and supported this growth projection based on the sales performance and profitability of the existing tenants.
We also contended that the completion of a long overdue renovation and modernization of the façade and other exterior areas would result in greater tenant sales, providing the landlord with further leverage to push rental rates. Investors were provided detailed schematics and renderings for a proposed renovation that the seller was not in a position to complete. With respect to the phase-two development opportunity, we presented compelling historical market data demonstrating strong tenant demand at sufficient rental rates that supported the feasibility of adding this additional space.


The Result

Cushman & Wakefield completed a sale at pricing that exceeded our client's expectations. The purchaser was a major public REIT that acquired "best-in-class" retail assets offering long-term upside potential. The purchaser accepted our contention that rental rates were below market for the national retailers based on their own portfolio and how much rental these tenants can support given their sales at Tower Shops. The purchaser is also intending to complete a major renovation of the center.