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Big Deal: Three Key Retail Plazas Sold

  • The North Country Plaza seen on Friday, Dec. 15, 2017, in West Lebanon, N.H. A Boston-based commercial real estate development and investment company has purchased three shopping plazas in the area, including this one. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Lily Le, left, of Lebanon, N.H., gives a pedicure to Tammy Begin, of West Lebanon, N.H., on Friday, Dec. 15, 2017, at NgL Nails in the North Country Plaza in West Lebanon. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • The Kmart Plaza seen on Friday, Dec. 15, 2017, on Route 12A in West Lebanon, N.H. A Boston-based commercial real estate development and investment company has purchased three shopping plazas in the area, including the one. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Phil Forsyth, of Wilder, Vt., browses through CDs on Friday, Dec. 15, 2017, at Newbury Comics in the Kmart Plaza in West Lebanon, N.H. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • The Miracle Mile Shopping Center seen on Friday, Dec. 15, 2017, in Lebanon, N.H. A Boston-based commercial real estate development and investment company has purchased three shopping plazas in the area, including this one. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

  • Lisa Judd, of Norwich, Vt., looks for new boots on Friday, Dec. 15, 2017, at Hubert's Family Outfitters in the Miracle Mile Shopping Center in Lebanon, N.H. (Valley News - Charles Hatcher) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.



Valley News Business Writer
Sunday, December 17, 2017

Lebanon — The Davis Cos., a Boston-based commercial real estate development and investment company, has acquired three Lebanon shopping centers from the real estate division of South Portland, Maine-based fuel distributor Dead River Co. for a total of $27.15 million.

The properties — the Kmart Plaza and North Country Plaza along Route 12A in West Lebanon, and the Miracle Mile Plaza on Route 4 in Lebanon — are in the heart of the Upper Valley’s retail shopping corridor and include such anchor tenants as Kmart, Books-A-Million, T.J. Maxx, Payless ShoeSource and Panera Bread in West Lebanon and Hubert’s Family Outfitters and ClearChoiceMD Urgent Care on the Miracle Mile.

The Davis Cos. paid $16.5 million for Kmart Plaza, $5.65 million for North Country Plaza and $5 million for Miracle Mile Plaza, according to records on file with the city’s assessment office.

The sale represents a substantial return on investment for privately owned Dead River Co. The company acquired the three commercial properties from NB Development Group in 2000 for a total of $10 million.

Dead River said it was selling its Lebanon properties because the company is liquidating its commercial real estate business, which it entered in the 1980s after selling off its Maine timberland tracts, in order to focus on its core fuel oil and propane distribution business. The company sold the Powerhouse Plaza shopping center in West Lebanon in 2015 for $12.35 million.

“All commercial real estate goes through a cycle,” said Anne Littlefield, vice president at Dead River Co. “Dead River ... has owned all three properties since 2000 and we had decided back in 2013 to focus entirely on ... energy investments. So we have been selectively marketing the investment real estate portfolio since 2013 and we identified when each asset should go on the market based on when the key leases would roll over.”

This was the year for the three properties in the company’s West Lebanon-based Windalier Portfolio, “which were some of the last assets,” she said.

(The Miracle Mile Plaza is the fifth significant commercial property along that stretch of Route 4 to change hands in the last year or so, following the sales of Flanders and Patch Ford, Bridgman’s Fine Home Furnishings, Gerrish Honda and Twin States Harley-Davidson.)

Officials with The Davis Cos. said they were attracted to the Lebanon shopping centers because their tenants have performed well despite the difficult environment for many traditional brick-and-mortar retailers. They also hinted that they are looking at broadening the tenants in the shopping centers that could draw traffic outside the typical daytime shopping schedule.

“These retailers have shown tremendous power and growth in face of the digital age,” said Diane James, director of marketing and communications for The Davis Cos. “Necessity-based goods and service are thriving.” She said the company intends “to create a vibrant up-to-date retail experience” at the properties and is “looking at a tenant mix appealing to customers both day and evening as well,” and at “opportunities for dining.”

More Than Shopping

The sale of the Dead River properties is the most recent indication that the stronger U.S. economy is playing out in Lebanon.

WS Development, owner of Upper Valley Plaza, is undertaking a $1.9 million project to divide the space formerly occupied by a Shaw’s supermarket for new tenants PetSmart and HomeGoods. And a Michigan developer, Alrig USA, last year acquired the former Pizza Hut site on Route 12A, which also was owned by Dead River, and recently completed a $1 million-plus building whose tenants include Aspen Dental and a soon-to-open Starbucks.

Moreover, there may be a new generation of opportunities for development at the plazas as more than simply shopping destinations, according to Bruce Waters, a commercial real estate broker with Lang McLaughry Commercial in West Lebanon. Waters pointed out that, a few years ago, the city modified its commercial zoning rules to allow residential units to be built above retail complexes.

“You can now redesign or repurpose to allow for residential apartments above the first floor, so you retain the capacity of having retail on the first floor but then expand by having residential properties,” he said. “As the Upper Valley continues to grow, you’re going to need additional housing to service that growth.”

Waters said such mixed-use zoning could be appealing to developers coming into the market and looking at a 20- to 30-year horizon for their investments. “We only have so much viable commercial land ... available to develop in Lebanon, so if you’re going to grow you have to think how to reuse these properties.”

Josh Kagan, managing director of retail for The Davis Cos., said such so-called “densification” was an option for the Lebanon shopping plazas, but added “the strategic plan for these properties at this point is to build on their past success, and how that specifically evolves is yet to be determined.”

“We’re really interested (in creating) a more vibrant, experiential shopping experience” for the public he said.

John Lippman can be reached at jlippman@vnews.com.

Correction

Miracle Mile Plaza was one of the three  commercial properties in the city of Lebanon sold recently by Dead River Co. to The Davis Co. The name of the Route 4 shopping plaza involved in the sale was incorrect in an earlier version of this story and an accompanying graphic.