Boulevard Plaza Shopping Center

Location: Wilson, NC

Acquired: November 2004



DRV pursued an opportunity to acquire Boulevard Plaza Shopping Center, a Piggly Wiggly-anchored community shopping center containing 115,815 square feet of rentable space on 10.6 acres. The property was constructed in phases in 1966 and 1979. Adverse environmental conditions and extensive deferred maintenance presented an opportunity to purchase the asset at a discount to its intrinsic value. DRV was acutely aware that the historical stability of the property and strength of the anchor tenant provided the prospect of value-creation through the remediation of the property’s issues.


DRV purchased the property for $5,375,000. The seller provided non-recourse first trust financing at below-market terms. Mezzanine debt and equity were provided by a syndicate of private investors.


The operating strategy was to take advantage of low-cost governmental programs to remediate the environmental condition and make targeted investments in improving the property’s curb appeal. Simultaneously, DRV sought to renegotiate Piggly Wiggly’s lease to incorporate market expense reimbursements and an extended term; the discovery, during due diligence, that tenant failed to properly exercise a recent lease option created bargaining power. Collectively, these actions were intended to enhance the asset’s value and liquidity.


The above strategy was executed over an 18-month period. Based on the improved property condition, several tenants extended their leases at increased rental rates. The property was sold for $6,950,000 after three-plus years, generating a 34.5% IRR.

Type: Retail
Strategy: Value-Add
Sold: January 2008
IRR: 34.5%

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