THE VILLAGE SHOPPING CENTER
*Sold
NWC Highway 87 & Forest Drive
802-806 N. Highway 87 (Beeline Highway), Payson, AZ
| Price | $990,000 | |
| Price per SF | $88.46 | |
| Occupancy | 100% | |
| Cap Rate (Actual) | 8.32% | |
| Cap Rate (Proforma) | 7.75% |
The subject property is a high-visibility retail strip center that was built in 1972. The property is part of the well-known development named Swiss Village containing a mix of single and multi-tenant properties that are all in-line and adjacent to each other, similar to condos but with no association. Each owner is responsible for their own maintenance and expenses. All the space in the center directly faces the Beeline Highway (AZ 87) offering all tenants excellent visibility. The intersection has a traffic light. There is a large monument sign in the middle of the center.
The center is offered at well below replacement cost at only $89/sq. ft. The cap rate based on the current 97% occupancy is 7.61%. The cap rate at proforma 95% occupancy is 7.5%. The rents are very low and average $10.24/ sq. ft. modified gross. Average retail rents in Payson are $12.11/ sq. ft. NNN and the most similar strip centers are asking $10.00 to $11.00 NNN. There is $3.00/ sq. ft. of rent upside by just converting the leases to triple net. Some minor property, landscaping and signage upgrades would put the center in position to achieve those rents.
The adjacent La Sierra Mexican Restaurant, a very popular business that is owner-occupied, is not included. They contribute $600 per year toward the Common Area expenses.
Located only a quick and very scenic hour and a half drive from Phoenix, Payson offers a cool and relaxed retreat in the pines. At 5,000 feet of elevation, the weather is much milder than Phoenix and is usually 10-15 degrees cooler than Phoenix. A beautiful, relatively new four lane highway connects Phoenix to Payson. Major retailers like Walmart, Home Depot, Safeway, Basha’s, PetSmart, Goodwill, Dollar Tree, Big Lots, Big 5 Sporting Goods as well as all the big chain fast-food restaurants are located in Payson. Some of these restaurants are rumored to be the highest volume stores in Arizona. On summer weekends, the highways in and out of Payson are extremely busy since Payson is the first stop for people headed north in Arizona.
