Conifer Town Center Foreclosure

Guess I misread - I thought Big R was going in at the Old Safeway center.

This does not surprise me in the least. Having spoken to former business owners in there, the owners set the rates. However, that could have been a miscommunication on the owner's parts about who was actually setting rates.

THANKS hvgal for the response. It is puzzling to me.....in your expertise does KS shopping center have the same problem and are we
looking at same scenario eventually? I KNEW going in that when they "clear-cut" the mountain and slapped the center into the middle of it that there WOULD be ramifications. Karma is a true thing. When the plans were first laid before the public,it was NOT clear cut
property being discussed. I,for one, RARELY shop at Safeway because of the mis-use of the land and the blatant mis-information that was put before the public. JMO

King Soopers doesn't have the same problems. Kings is growing and they are filling out their empty places. Unlike Safeway, they didn't remove half of a mountain, making the costs of the site way too high (and therefore making rents too high).

Rumor has it safeway loses money every month there. If they had only stayed and added on at the old center, they would be doing fine!

Hi Rene......from a corp. stand point.....taking into consideration Chili's Chain of rest......would Safeway then elect to shutter THIS location and go elsewhere? I ask the question because I know Dosier was working REALLY hard to get City Market/or any grocery to
Crow Hill in Parkco. (MUCH cheaper rent and I believe the other side of Kenosha would make it profitable for him)......just my brain thinking out side of the box and speculating on Safeway's losing money on that site.As an anchor story in that center,it would suggest
they MIGHT opt out?

What I've heard is Safeway doesn't want to give up the market share to Kings. They are willing to support a losing store to avoid that. Grocery stores are different than a Chili's. Market share is really important, not just profitability of individual stores. Chili's actually did ok up here, but just didn't turn enough profit compared to other restaurant's nationally, so they chose to close it.
Too bad, the old safeway was one of the most profitable per sf in Colorado, now they are struggling.

I would bet they have a fairly long term lease. Who knows what happens when that is over. Hopefully not what I think....that Walmart will take it over. :bash

Science Chic wrote: This info may be incorrect, but I heard that it wasn't the developers who set the ridiculously high rents, but rather the bank who held the loan, so that even if the developers wanted to lower rents in order to help the tenants stay in business and continue to pay them, they couldn't. Anyone know if that could be true?

I've heard the same thing from two realtors up here. They told me that the owners of that development had their hands tied when it came to lease rates, as they were set by the loan. Everyone was waiting for the default and foreclosure so they could then lower the lease rates and get stores to come back.

Kate wrote:

Science Chic wrote: This info may be incorrect, but I heard that it wasn't the developers who set the ridiculously high rents, but rather the bank who held the loan, so that even if the developers wanted to lower rents in order to help the tenants stay in business and continue to pay them, they couldn't. Anyone know if that could be true?

I've heard the same thing from two realtors up here. They told me that the owners of that development had their hands tied when it came to lease rates, as they were set by the loan. Everyone was waiting for the default and foreclosure so they could then lower the lease rates and get stores to come back.

This is not the first time that I have heard this but have to wonder if it is true. It seems pretty rediculous but it wouldn't be the first rediculous thing a bank has done. In all my years of owning commercial retail property I have never had a bank tell me what my rental rates should be.

It is my understanding that Chili's closed it store up here because even with the incredible business they couldn't make a profit with the cost of the water at the center. It was determined that it would be cheaper to pay the rent and close the store than continue to try to make it work. I don't know how long their lease was but heard they paid rent until it was done...and may still be paying rent. The fact that neither of the centers up here looked at their CAM costs and whether their tenants could make a profit is a in large part the cause of the problems. The King Soopers center has had the same problem. They have charged their tenants outrageous CAM adjustments with no warnings and recently created a water and sewer district and they got new bills for that. I know for a fact that there are tenants in that center that are really struggling and haven't paid their rents. I do think they have become more reasonable with their rents and hopefully Big R will help.

hvgal wrote: It is my understanding that Chili's closed it store up here because even with the incredible business they couldn't make a profit with the cost of the water at the center. It was determined that it would be cheaper to pay the rent and close the store than continue to try to make it work. I don't know how long their lease was but heard they paid rent until it was done...and may still be paying rent. The fact that neither of the centers up here looked at their CAM costs and whether their tenants could make a profit is a in large part the cause of the problems. The King Soopers center has had the same problem. They have charged their tenants outrageous CAM adjustments with no warnings and recently created a water and sewer district and they got new bills for that. I know for a fact that there are tenants in that center that are really struggling and haven't paid their rents. I do think they have become more reasonable with their rents and hopefully Big R will help.

I have a question to pose.......I am NOT an owner of a business nor have I EVER been self-employed,BUT,from a lay person stand point,it would seem EXTREMELY logic to draw up a business plan,KNOW
the demographics of the area I was looking at (to establish a business) and then I would still leave NO stone unturned in looking at worst case scenarios (business-wise) to access the viability of my endeavor....MEANING the water issue (from a mountain standpoint)
was/is a HUGE factor in this. .....and knowing that I would have BACKED AWAY from the endeavor,knowing the overhead was going to hit unsustainable. Is it NOT the fault of the business owner in NOT doing due diligence......had MORE perspective tenants backed away
the developer/bank/note holder would have been FORCED into re-accessing its' stance......JMO(sorry for break in text.)

it's up for sale in October if you have a few million to spare. Glad to see Diane will get a neighbor at Knitknook