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Case Study: RETAIL

   

Case Study:
LANDOWNER/JOINT VENTURE

 
 

Challenge: Expand Rite Aid Store on a Small Site at a Busy Intersection

Solution: Two turnkey developments and a 1031 Exchange produced upgraded retail stores in prime locations

The Dreher Group builds value by creating unique solutions for development problems.

In Lackawanna County, Pennsylvania, Rite Aid Corporation owned a small corner store on the town of Dunmore’s busiest intersection. Rite Aid wished to expand the store without leaving their prime location, but no land was available adjacent to Rite Aid or on any other corner.

Next to Rite Aid, Jerry’s Commercial Nursery was a retail fixture on the intersection. After an exhaustive site search, The Dreher Group approached Jerry’s with a plan to relocate the Nursery to a more visible highway location, and to build for Jerry’s a larger store with better retail facilities, which would also enable Rite Aid to build a new prototype store on the former Jerry’s site using a 1031 Exchange. Working with town leaders and zoning committees, The Dreher Group managed the acquisition, construction, and relocation process for both Jerry’s and Rite Aid. And, by leasing and fitting out a small retail store near Rite Aid’s new construction site, The Dreher Group enabled Rite Aid to keep their pharmacy operational throughout construction, keeping their customers happy as well.

 


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Challenge: Assist a Family with the Disposition of Large Land Holdings

Solution: Assemble a ground lease, new construction, and a redevelopment project in three contiguous deals to create a new retail destination.

In Wilkes-Barre, Pennsylvania, The Dreher Group joint ventured with a local family that had acquired substantial real estate holdings through its ownership of an independent supermarket chain in order to maximize their real estate assets and transition out of the operating business. First, The Dreher Group re-developed an older, 100,000 square foot center which had previously contained one of their supermarkets. The existing 100,000 square feet was leased to Raymour & Flanigan and Burlington Coat Factory, and a new freestanding Home Depot was built on the site. After that was complete, The Dreher Group took a 12-acre site the family owned, located at a new interstate ramp, and negotiated a new land lease with Wegmans and Applebee’s Restaurant. Then, on an adjacent parcel, Dreher completed a purchase of 24 acres from the regional Chamber of Commerce to combine with 16 acres the family already owned to create a 40-acre regional site. Rich Dreher then brought in CBL & Associates Properties, one of the nation’s largest retail REITs, and arranged for them to finance the acquisition and master leaseback of the entire tract, where CBL developed a 350,000 square foot regional center anchored by a Wal*Mart Supercenter. Having good working relationships with the municipality, the retailers, and especially CBL in this case produced a true coup d’etat for the family. Dreher then arranged to broker the sale of all but one of the dozen smaller stores to Associated Wholesalers, Inc. The family then relocated their last store to the site of their warehouse, where they operate successfully at this consolidated location to this day.