Legacy – Retail Strip Center

Legacy was acquired in July 2020 for $9 million as part of a two-property 1031 exchange following the sale of Union Heights, a retail investment in Salt Lake City that achieved a 25.3% IRR compared to a 23.12% underwritten IRR. Like the majority of our investors, the capital in this transaction was structured through a 1031 exchange, allowing investors to defer taxes and compound returns.

The property is a multi-tenant neighborhood retail strip center composed primarily of small shop spaces ranging from 1,000 to 7,000 square feet, with two larger tenants including Uptown Jungle (17,995 SF) and AutoZone (6,822 SF). The investment strategy focused on marking rents to market across the small shop spaces while maintaining strong tenant retention.

At acquisition, underwriting projected achievable rents between $15–$17/SF NNN for the majority of the small shop suites. Through proactive leasing and renewals, the team successfully executed 62% of the suites at $24/SF NNN or higher, materially exceeding underwriting assumptions. Additional value was created through the renewal of Uptown Jungle, where the tenant renewed at $17.63/SF, nearly double the original underwriting assumption of $9/SF.

Across the property, approximately 80% of tenants are now paying rents above pro-forma levels, while the remaining tenants either have fixed rent options or have not yet reached renewal periods.

The leasing strategy was executed with strong capital discipline, with tenant improvement costs materially below underwriting projections. The property is currently under contract for sale at $14.175 million, significantly exceeding the original projected exit price of $11.5 million.

The investment is projected to achieve a 17.6% IRR compared to the originally underwritten 13.95% IRR over a five-year hold.