Loup Development and Western Centers are a lot alike.
Both Loup and Western Centers are longtime family owned commercial real estate firms with decades of history of owning and managing small shopping centers and other properties in the Denver area and Colorado.
Both firms have a reputation for treating tenants in their shopping centers like family.
While Arnie Meranski, the founder and owner of Western Centers, and Jim Loup, the son of Robert “Bob” Loup, the late founder of his namesake firm, have known each for decades, they have never done a deal together – until now, that is.
Loup, based in LoDo, recently paid $5.13 million for the 19,755-square-foot Meadows Shopping Center near the Park Meadows mall in Lone Tree.
The sale keeps a long tradition of local ownership for the older center in a high-demographic area.
“You hear so much today about California companies buying up retail centers and other properties in Denver, I think this sale stands out in that the sale is a continuation of an asset being held long term by one local real estate family and being sold to another local real estate family,” said Corey R. Wagner, an executive vice president of Aurora-based Western Centers.
Meranski purchased the Meadows Shopping Center at 8848-8878 Maximus Drive in 2005. It was built in 1986.
It was 100 percent leased, as are many of Western’s properties, when it was sold.
While the Meadows is small, it is in one of the highest demographic areas in the Denver area. The median household income within a 3-mile radius is $104,963, according to CoStar.
Quite possibly, Western Centers could have sold it for more to a buyer from California.
“Honestly, I’m not sure if Arnie would have sold this for the same price to one of these out-of-state guys or a larger REIT or something,” Wagner said.
Meranski wanted to make sure that the tenants in the shopping centers remained in good hands after a sale, he said.
So often, out-of-state operators don’t understand a local market and a center like this one, which is largely occupied by mom-and-pop retailers, Wagner said.
“A lot of times, if a tenant asks for something, it has to go through so many layers of bureaucracy that they just can’t be very responsive,” he said.
Meranski initially put the center on the market in 2016, and while there were a couple of offers, “Nothing came to fruition,” Wagner said.
“In my opinion, I don’t think Arnie was very serious about selling it a couple of years ago,” Jim Loup said.
The center wasn’t for sale earlier this year, but Loup had just sold Cheyenne Plaza, near the Broadmoor Hotel in Colorado Springs, and was looking for another property to buy for a 1031 exchange.
Dan Grooters, “who was loosely the broker on both sides,” called Loup and suggested that Meranski might be willing to sell.
Grooters, a veteran broker with Newmark Knight Frank, with partner Riki Hashimoto, has done a lot of deals with both Loup and Western Centers over the years.
“A little neighborhood center like this is perfect fit for our portfolio,” Loup said. “And you can’t beat the location.”
Western Centers, he said, kept excellent care of the Meadows Shopping Center.
Loup started working with his father in the family business in 1984.
“My dad actually started the firm back in the 1960s,” he said. The elder Loup died last year.
Over the decades, Loup has both owned and developed shopping centers, apartments and even some single-family homes.
“In the past few years, we have really been concentrating on managing our own properties, rather than developing,” he said.
“Of all the asset classes, we like retail the best,” Loup added. He also is interested in becoming involved in the local industrial market.
Loup noted that he has known Arnie Meranski for decades, but has never done a deal with him before.
Over the years, he has made a run for a couple of Western properties on the market but never pulled the trigger.
And Western Centers owns a shopping center in Aurora that Loup originally developed. Western Centers did not buy the center, Havana Exchange, from Loup, however.
“So there have been some connections between us over the years,” Loup said.
But the biggest connection might be how similar the firms are to each other.
“I agree that our two firms are a lot alike,” Loup said. ”And I think if Arnie had really hit the market (with the Meadows Shopping Center), I’m sure he could have sold it for even more than what we paid.”