The Project: Heslin Holdings purchased the 89k s.f. Kmart building for $4,350,000 or $50/s.f. The property is located in the affluent and growing city of Rio Rancho, NM and was occupied by Kmart who had another 8 months of primary lease term remaining along with 30 years of options.
Challenges: At Heslin Holdings we are value-add investors/developers and do not pursue stabilized properties. Heslin Holdings used experience and market knowledge to accurately estimate that Kmart would not exercise their options and instead vacate at the end of their lease term. This allowed Heslin Holdings to purchase the property at below market pricing based on the extremely low rent Kmart was paying.
Results: Heslin Holdings is currently in negotiation with several national retailers to re-position the building.