Arnie Meranski has had a relationship with the Iliff Crossing Shopping Center in Aurora that dates back to the early 1990s.
“I bought it three times and sold it once,” said Meranski, founder and head of Western Centers.
Confusing?
Not really.
That is because in each transaction, the common denominator was Meranski himself.
“The Iliff Crossing Shopping Center has always been one of my highest performing properties with a phenomenal location, great traffic, stable tenants and excellent financial performance,” Meranski said.
The center at the northwest corner of Iliff Avenue and Buckley Road is 100 percent leased “for the first time in the past 30 years,” he added.
The center was anchored by an Alberstons and a Walgreens when it opened in the early 1980s, he said.
“I first purchased it from Boettcher Properties, which had different funds to own real estate when it was around, in 1992,” Meranski said.
His partners in the deal were New York developer Jonathan Rose and Bruce Heitler.
“We paid $3.1 million, I believe,” Meranski said.
“Exactly a year later, to the day, we sold it to a Korean investor for $4.1 million, so we made $1 million. That was kind of cool,” Meranski said.
The buyer asked Meranski’s Western Centers to continue to manage it, so he remained involved in the center, even though he no longer owned it.
Then, tragedy struck the new owner.
He lost a child in a Jet Ski accident and he moved back to Korea.
“So I bought it back from him. I think I paid him $6 million.”
Then, the original Walgreens pulled out, soon followed by Albertsons.
“That is how the center kind of morphed into a discount-type of center,” he said.
Tenants now include Advance Auto Parts, Angelo’s CD’s & More, Little Caesars, Wing Stop, Baskin-Robbins and Metro PCS. The most recent tenant, Lightshade Labs, is one of a few select retail marijuana stores permitted by the city of Aurora.
The largest single tenant is Unique Thrift, which has 41,209 square feet, according to CoStar.
“Unique Thrift is part of the Saver family of stores,” Meranski said.
The center has a total of 103,126 sf, according to CoStar.
When Meranski bought the center from the Korean investor, he did it through ASM Pearl LLC.
In a recent transaction, he sold it again, this time for $6.58 million.
However, Meranski himself stayed in the deal.
In fact, Western Centers is one of the new owners.
“When I purchased it from the Korean gentleman, I owned 100 percent of it myself,” Meranski said.
“The new partnership that bought it includes about five very loyal family and friends. I still control 50 percent or 51 percent,” he said.
“Really, we are recyclers,” bringing in new partners, rather than selling it outright to a third-party ownership group.
He noted if he sold it outright, he would have needed to deploy the money elsewhere and given today’s high prices and low cap rates even for unanchored centers, it is difficult to find an investment than would be a better investment.
The new ownership group is investing in the neighborhood of $1.5 million to $2 million in upgrades to Iliff Crossing.
Improvements include a new parking lot, a substantial façade remodel and new signage.
“We put about $1 million into the new parking lot,” Meranski said.
“It is going to completely change the look and feel of the center,” he said.
Western Centers is headquartered in Aurora and it owns a number of centers in the city, he said.
“We have always been kind of an opportunistic and contrarian type of buyer,” Meranski said.
“As you know, forever, Aurora was considered a second-class citizen by investors and lenders, but we liked, and continue to like, Aurora,” he said.
“We have seven or eight assets in Aurora and we are one of the largest retail owners in the city,” he said.
Western Centers has sold a number of centers, some of them outside of the core Denver metro area.
“We like to own a maximum of about 20 shopping centers, otherwise, you can’t achieve the right balance between work and play,” Meranski said.
Western Centers has never lost money on any shopping center investment and Iliff Crossings is no exception.
“I think our investors are already getting a 9 percent or 10 percent return,” Meranski said.
“We’re holding this one for the long term.”
