Firm Specializes In New Life For Old Shopping Centers
Big changes in the retail sector have meant thousands of small strip malls are either dead or dying. But a Tallahassee company is focused on giving new life to those distressed properties.
The Edgewater Group, based in Philadelphia, Pennsylvania, has had a North Florida presence for some time.
"The group that I work with, they started investing in this area in 2013. So, we've been here about eight years and they really fell in love with this area, because they concentrate on the tertiary markets. They don't go for the big cities; they like that small-town feel. So they came into Tallahassee and Apalachicola and started purchasing some properties and fell in love with the small-town feel."
Those are the words of Shannon Boyd, Edgewater's regional manager whose office is in Tallahassee.
"So the Edgewater Group is a twofold situation. First off, we as a management company manage property for third-party owners. Secondly, we're investors, so we invest in the community by buying properties that we then rehab."
A recent prime example of this, said Boyd, was a run-down, mostly vacant strip center sandwiched between West Tennessee Street and Mission Road.
"It's a little community retail center right across the street from Tallahassee Community College's main entrance. When we purchased it, it had 2 tenants: Dollar General and a small engine repair shop."
Boyd said Edgewater picked up the property for the bargain-basement price of $600,000.
"And we went in and made a lot of capital improvements to the property and really made it shine. And in doing so, we were able then to turn around and get that property 100% leased and it's been amazing! We have a great group of tenants in there, all local. One is a beauty supply (firm) and they've opened their third store in town and it's their highest operating store. And since then, we've sold that property."
The sale price was three-a-quarter times what Edgewater paid for it. A subsequent million-dollar refinancing provided even more return for the new owners. But Boyd insisted her firm isn't only focused on investment return. Another core principle she said, is helping leaseholders be successful.
"We try to help these people with their startup costs. When you sign a lease, it's a huge expense upfront. So we go in and try to help these people by providing rent concessions, or possibly working with them on their security deposit. We'll do a payment plan so it doesn't have to come out of pocket so much from the up-front, so they can use their capital to do their tenant build-out and get their property - their storefront - ready to open."
The idea, concluded Boyd, is to turn neglected, unattractive strip malls into fresh, inviting environments that bring in local entrepreneurs and their customers.
"When they want to get a service, like getting my nails done, I want to go to a shop that I feel good walking into, that the owner is proud to have you walk into. You don't want to go into a dingy, dirty, dark, run-down retail center. You want it to have life, a personality and a safe, clean, bright, open area environment and that's what our goal is."
Even before the pandemic, national chain retailers were seeing their brick-and-mortar business in decline. Many of these stores were located in strip malls, which declined as these stores moved out. Boyd sees the rebirth of these properties as fertile ground for Edgewater's future.
"We're constantly looking for new properties and we're looking for something that we can go in and do the value-add to. We want to go in, buy low, make the capital improvements and make the property shine. Then either hold onto it or find another investor who's interested in purchasing it."
And, at the same time this Tallahassee interview was happening, the Edgewater Group was getting ready to open a second Florida office in Naples.