Chinle Plaza sells for $1.67M; REI may move
KCM Grand Junction One LLC has purchased the REI-anchored Chinle Plaza at the corner of North Avenue and Seventh Street for $1.67 million, the largest retail center deal in Grand Junction this year.
“The deal presented several unique challenges. The majority of the parking lot was on a short-term ground lease, and REI’s lease has fewer than two years remaining,” said Justin Krieger, a broker with Marcus & Millichap Real Estate Investment Services in Denver, which represented the seller, Chinle Plaza. “It appears that it is very likely that REI will move out of the center to a bigger location. Despite these challenges, we were able to get the deal done by negotiating an extension to the parking lot lease and demonstrating the upside in the REI lease rate should they vacate.”
REI has expressed interest and submitted drawings to move into the Rimrock Crossing project near Lowe’s on U.S. Highway 6&50.
Other businesses on the Chinle Plaza property include Bocaza Mexican Grille, the Game X Change, the Mexican Carniceria and a stand-alone drive-up coffee hut.
Business owners on the property don’t expect immediate changes, at least one business owner said.
Bocaza Mexican Grille, where two months ago owners say they ventured successfully into the breakfast burrito market, has three years left on its lease with an option to renew.
“Especially with REI there, which is a national chain, that brings people at least into the parking lot,” said Terry DeHerrera, who received a call from the new property manager on Tuesday informing him of the sale. “We get a lot of business from the local high school (Grand Junction High School) and from workers anywhere from St. Mary’s (Hospital) all the way down to Main Street.”
DeHerrera’s business signed a form prior to the sale that said if the center sold, the terms of the lease would remain the same, he said.
The purchase is the first Grand Junction transaction by the buyer group, KCM Grand Junction One, represented by Dave Potarf, also of Marcus & Millichap.
“Investors outside of Grand Junction are generally bullish on the area,” Krieger said. “We received three strong offers within one week. While local — Grand Junction — buyers generally seemed to think the deal was overpriced, out-of-market buyers, many of whom are bullish on Grand Junction, competed aggressively.
“The buyer intends to hold the property and purchased it because of its great location (high traffic intersection and adjacent to Mesa State’s growth), its current income and cash flow, and the long-term potential of Grand Junction,” he said. “In short, they see it as a good investment that appears to be stable in the long run.”
The deal closed at 97 percent of list price within 45 days. The buyer is a family trust.