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The Shoprite Plaza is a 56,555 square foot Grocery anchored shopping center located in Ulster county NY. It is Anchored by 46,750 square foot Shoprite structured on an absolute NNN master lease. We had the ability to buy this property at a discounted price of $9,500,000.00 at a compelling going in cap rate of 10.03%. Shoprite has been on site since the property was developed in 1993 on a 40 year original lease term and 4-5 year options with 6.5% increases in every option there on after giving rent control until 2044. This is a conservative investment opportunity with no landlord responsibilities. There are 6 other essential, internet resistant tenants. China House, Spin City Laundry, Allstate Insurance, Hollywood Cuts, Paradiso Restaurant and a walk in medical clinic. The property is neighboring a $50 million dollar Regional Hospital that will be a direct economic driver to the demographic.
ShopRite, a subsidiary of the Wakefern Food Corporation, is a prominent grocer in the northeastern United States with over 296 stores serving 5 million customers weekly. ShopRite has built its reputation as a value-price leader offering an unprecedented variety of products while maintaining excellent customer service. ShopRite is the largest grocer in New Jersey, the New York Metro Area, and the Greater Philadelphia area.
Although this property is 100% occupied and stabilized, it also has a very strong value add component too. The way we will add value by extending Shoprite and increasing NOI through contractual rent increases and will look to develop and spin-off a single tenant outparcel. By leveraging off the relationships we have with these national brands and renegotiating their lease terms will give us the upside component we are looking for.
We then will implement our exit strategy of selling or refinancing within the 3-5 year term.