Dahlem and Berkeley Capital Partner to Sell Dixie Crossings in Louisville
The Dahlem family has been fortunate to have a lifelong relationship with the owner of Dixie Crossings Shopping Center in Louisville, Kentucky. The owner reached a point in his life where it was in his and his family’s best interest to divest of this property.
We began to discuss the idea of him selling his property in late 2019. We explained to him the market timing was good, his long-term ground lease with a Kroger Marketplace would be well received in the market and the property was debt free. Our recommendation to the owner was that we should engage our friends at Berkeley Capital Advisors to partner with us on the sale.
The plan was to take the property to market unpriced at end of March 2020. At the same time, the pandemic struck the United States, and the shutdown began. We all decided it best to hold until there was more certainty in the real estate market and the national economy.
A year passed and retail real estate proved to be remarkably resilient during the pandemic, particularly grocery stores. Capitalization rates compressed and grocery store anchored centers were a favorite of both investors and lenders. During the Spring of 2021, we reengaged the owner he agreed to take the center to market. He was concerned that we could not get him the price he was hoping to garner. We explained to him that if we could not get his strike price, he could just say no, we would take the center off the market, and he would continue to own it.
We took the property to market in early July 2021, and we had a flood of interest. There are a lot of dollars chasing deals as we begin to see our way through the pandemic. We called for offers in late July and by August 12 we had nine offers on the table. The owner made the choice for the highest offer, and we began to negotiate the contract. It took a little over a month to complete the negotiations on the contract, but that really did not matter because Kroger had a thirty day Right of First Refusal (ROFR) on their portion of the property. When that expired without Kroger exercising this option, we finished the contract.
The buyers had started their due diligence during the thirty-day Kroger ROFR and they had that concluded relatively quickly. The property transacted on December 31, 2021. From going from market to closing, the time period was six months.