JLL Capital Markets announced today that it has closed the $165.25 million sale of and secured $102 million in acquisition financing for La Encantada, a 246,256-square-foot, open-air lifestyle center in Tucson, Arizona.
JLL represented the seller, Macerich Company. A group of local investors purchased the asset in a strategic sale. Additionally, working on behalf of the new owner, JLL arranged the fixed-rate, full-term, interest-only acquisition loan with an investment bank and financial services company.
Completed in 2003, La Encantada is 93 percent leased to some of the most recognized names in apparel, home goods, beauty and jewelry, including Crate & Barrel, Tiffany & Co., West Elm, Anthropologie, Athleta, Lululemon, Pottery Barn, Madewell, Warby Parker, Williams-Sonoma and Bluemercury. Additionally, the retail center is home to popular health, wellness and fitness options Barre 3, Core Health & Fitness, Fuchsia Spa and Laseraway, along with a variety of full service and specialty food and beverage retailers such as AJ’s Fine Foods, RA Sushi Bar and Restaurant, North Italia and Blanco Tacos + Tequila.
Situated near the base of the Santa Catalina Mountains in the highly sought-after Foothills Retail submarket, La Encantada is at 2905 E. Skyline Dr. at the intersection of Skyline Dr. and Campbell and is surrounded by some of Tucson’s most prestigious, affluent and in-demand neighborhoods. More than 35,000 residents earning an average annual household income of $120,785 live within a three-mile radius of the property. Additionally, the center is the premiere retail asset in Tucson and pulls from an extended trade area due to having significant market exclusive retailers and restaurants.
The JLL Capital Markets Investment Sales and Advisory team that represented the seller was led by Managing Director Patrick Dempsey.
“This asset is the crown jewel of Tucson retail,” Dempsey said. “Many stores at La Encantada are exclusive to the area, with a draw expanding the entire market. Lack of available land for new development in the Foothills Retail submarket makes La Encantada an irreplaceable property.”
The JLL Capital Markets Debt Advisory team that represented the new owner included Senior Managing Director Jeremy Womack and Analyst Zane Coffman.
“The CMBS execution by the lender was best-in-class, and we are pleased with the incredibly low interest rate and full-term interest-only payments,” Womack added. “While the market for loans secured by some retail properties can be challenging, the high-quality of this asset, excellent tenant mix and stellar sponsor in the partnership between the three local owners helped facilitate us obtaining best-of-the-best loan terms for the new owner.”
JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm’s in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.