Meadowbrook Shopping Center

After: 
Before: 

910 W. Lincoln Highway, New Haven, IN

The Challenge

Located in a bedroom community of Fort Wayne, Indiana, this property was a former single-tenant department store that had languished in various states of vacancy and disrepair for the previous ten years and was in need of significant capital improvements and repair.

Opportunity Identified

Despite a flat local property market, Capstone saw opportunity in the property’s low basis at below replacement cost, its prime location which included a signalized entrance and more than 800 feet of direct frontage on the major retail thoroughfare of the area, and substantial developable land which could significantly increase the size of the shopping center.

Results for Capstone Investors: 30% IRR since 2004

Capstone acquired the property with the objective of maximizing its long term cash flow through a three-stage redevelopment process. First, following consultations with the center's existing anchor tenant, Capstone designed and implemented a renovation program resulting in the anchor tenant extending its lease and also investing significant capital to renovate its own space. Next, Capstone engaged area leasing brokers and management professionals to re-position and market the property as the area's dominant discount shopping center. Finally, the center would be expanded in two stages, with the objective of signing on complementary, high quality tenants to maximize re-sale value, but in a manner to maximize property cash flow.

Following Capstone's initial renovations to the property, the anchor tenant, Big Lots, re-signed a new, long-term lease and immediately renovated its space. A new lease with Family Dollar, another national discount retailer, was then signed. The center was then quickly refinanced, returning capital to Capstone investors. Major capital improvements - including a new retail building, new parking lot, new building facade and multi-tenant loading dock were performed - enhancing the property's image and market presence and resulting in the signing of additional complementary tenants, including O'Reilly Auto Parts, Rent-A-Center, and others. An outparcel was land leased and then sold returning additional capital to Capstone investors. Leasing velocity remains solid as Capstone begins the second stage of its property expansion plan.