Updated: June 26, 2014 at 2:16 pm
An Arizona group that bought the Erindale Centre on North Academy Boulevard hopes a new name, improved access and a series of property improvements will pump life into the aging retail center, where nearly 60 percent of the storefronts are vacant.
Kinetic Companies of Phoenix, which specializes in commercial development, brokerage and investments, paid $5.5 million in March for the center, southeast of Academy and Vickers Drive, El Paso County land records show. The purchase includes about 187,000 square feet; it excludes a portion of the center occupied by Woodley's Fine Furniture, which owns its space.
Jeff Hawke, a principal and co-founder of Kinetic, said the company has wanted to invest in the Colorado Springs area for years because of its growth potential and quality of life. Erindale Centre, with its location along busy North Academy, is "fundamentally sound real estate" that can rebound once upgrades are made by a landlord that pays attention to tenants' needs, he said.
"It needs a little bit of tender loving care, coming through the economic downturn of the last six to seven years," Hawke said Wednesday.
The center has gone through a handful of owners since it was built in 1983. At one point, it was known as the North Academy Home Center, and previous owners sought to fill it with retailers in the furniture, home furnishings and related businesses.
A decade ago, an Oklahoma City group paid $18.3 million for the center; those owners fell into foreclosure in 2011, and a lender took control of the property. Several tenants have left in recent years, and the center - which includes four buildings that front Academy and two more set back from the corridor - has a vacancy rate of 58 percent. That's about five times higher than the average shopping center vacancy rate in the Springs during the first quarter of this year.
Kinetic will rename the property Centerpointe Plaza, highlighting its central location along that stretch of Academy, said Joel Moyes, another Kinetic principal and co-founder. Household incomes are higher in that part of town, and Academy - surrounded by thousands of homes - long has been one of the city's major retail corridors.
"The densities here in the corridor, in the Academy corridor, are incredible," he said.
Kinetic also plans to repaint facades and add step-stone veneers to building columns, among other upgrades.
Kinetic also will add two left-turn lanes along Academy to allow southbound traffic to turn into the center. Up to now, shoppers could only enter off Vickers or from entrances along northbound Academy. Also, Kinetic will rebuild the Vickers entrance, turning it into a full interchange so that traffic from both the east and west can enter the center, and shoppers can turn both ways as they leave.
The new owners have budgeted $1 million for the improvements. Hawkesaid.
Kinetic plans to market the center to all tenants, not just furniture or home furnishing stores. When the housing market sank during the recession, the center was hurt because of its ties to one segment of the economy, Moyes said.
"We want to make sure we have a diverse tenant mix that can sustain economic cycles," he said.
CBRE Inc. broker Patrick Kerscher, who's marketing the property with brokers Dan Rodriguez and Whitney Johnson, said the improvements should attract new tenants.
"There's a positive story to tell when you take a center like this to market," he said.