Another high-profile local developer is making a move to capitalize on the city's hottest retail corridor, joining mall
giant Simon Property Group Inc. and upstart Premier Properties USA Inc.
Kite Realty Group Trust paid $18.3 million for Rivers Edge shopping center, a 111,000-square-foot property just east of Clearwater Crossing. Rivers Edge sits between The Fashion Mall at Keystone and Castleton Square Mall, two top-performing Simon-owned projects.
The area has been buzzing with development news. Simon is working on plans for a huge expansion of The Fashion Mall and just finished a lifestyle expansion of Castleton Square, and Premier has floated plans for a $750 million retail, office and residential project called Venu. Rivers Edge is Kite's first property in the corridor. Its nearest retail centers are Glendale Town Center, Fishers Station and Hamilton Crossing.
The publicly traded developer closed the deal Feb. 1, and isn't revealing details of its plans yet.
The firm is expected to add more retail space and spruce up the center, which is home to Office Depot, Bicycle Garage, Leland's patio-and-home store and several smaller shops. Kite also could look at purchases of neighboring properties, including the now-vacant AMC Clearwater theater, which sits behind part of Rivers Edge. The AMC property is owned by locally based The Broadbent Co.
The seller of Rivers Edge is locally based Sourwine Real Estate Services, a company that owns mainly office space. The property had not been marketed for sale. Sourwine officials did not return a phone message.
A long-term lease for Office Depot, the anchor tenant in Rivers Edge, is set to expire in two years, giving Kite an opportunity to renegotiate or pursue another tenant, said John Kite, the company's CEO, in a conference call with Wall Street analysts.
Kite is working with Bryan Chandler, one of the city's most prolific retail brokers and president of locally based Eclipse Real Estate, to market the center. The property is about 80-percent leased.
"The real estate is outstanding," Kite told analysts. "We have a great opportunity to come in and actually redevelop the whole center by re-tenanting and kind of repositioning."
The 82nd Street/86th Street corridor is an area retailers covet. The average household income within a five-mile radius of Rivers Edge is more than $80,000.
"I love Rivers Edge," said Bill French, vice president and principal in the local office of St. Louis-based Colliers Turley Martin Tucker. "It's a great location, with signalized access directly to 82nd Street. If you're a retailer, you can get a storefront with excellent exposure to the street."
For years, Kite has kept an eye on retail properties in the area. The company financed its purchase of Rivers Edge in part with proceeds from the sale of a property in Puyallup, Wash.
The company doesn't expect to tear down the property or undertake a redevelopment as drastic as the de-malling under way at the former Glendale Mall, where a Target store is slated to open this summer, said Dan Meador, a senior vice president at Kite. He said additional retail space for more shops and a new facade are possibilities.
"We think there's some embedded value in the asset," Meador said. "We will look at ways to maximize what we have on the site. At the end of the day, it's just a great piece of real estate."