Family owners of a local beauty trade school paid $5.6 million on Thursday in an off-market deal for a 1950s-era shopping center in downtown Orlando, with the seller turning a $1 million profit after only 12 months.
Located at 2110-2150 W. Colonial Dr., the Western Way retail center is fully leased, with the Orange County Tax Collector occupying more than a third of the 50,000 square feet of conditioned area.
The seller, Orlando Western Way LLC, was an investment vehicle for Miami-based commercial real estate broker Ralph Yammine, who paid $4.55 million for the property in January 2017.
Yammine bested a lot of bidders at that time for the asset, one of which wouldn't give up so easily.
Just a few months later, he was approached off market with an offer too good to refuse.
The buyer, Daikim of Western Way Center LLC, is an investment affiliate of Trangdai and Thuy Huong Nguyen, owners of local trade school the Academy of Health & Beauty.
"I reached out to Yammine on behalf of the Nguyens last summer and asked if he was willing to sell. They really wanted the property originally, and he did a good job of managing and renewing leases to grow its revenue in a short amount of time, so he created value," said Tony Nguyen, managing director and broker with TRG Commercial Real Estate, who is no relation to the buyers but represented them in the deal.
"But my clients bought at a competitive Cap rate in the mid-7 percent, so they felt it will offer good return for a stabilized property that's fully leased," he continued. "And they like the value-add potential of western downtown."
The Nguyens brought the property under contract with Yammine in August, but waited to close in January to help him minimize the capital gains tax, Tony Nguyen said.
The family's main business is their local beauty school, but they have built a small portfolio of commercial real estate holdings in Orlando and the Tampa area.
"They're passive investors that like these fully stabilized properties, for them it's a long-term hold," Tony Nguyen said.
The buyer sourced a $2.6 million loan from Wells Fargo Bank.
Built in 1955, the retail center originally boasted Lovett's Grocery and Doc Moses' drugstore as tenants. The kitschy sign featured neon lights that made the horse appear to move and the cowboy's lasso to spin.
Orlando's Historic Preservation Board voted against designating it a Local Landmark in 1994 because the neon tubes had been removed.