Orlando-based Kelton Capital Partners paid $1.55 million earlier this month for a fully-leased Sam's Club shadow anchor strip center on Kissimmee's W192 corridor.
Co-founder Kevin Smith told GrowthSpotter the partners were attracted to the W192 corridor because they see strong capital investment and diversification along the highway.
"It had always been a tourism-dominated area," Smith said. "Now we're starting to see more residential development, so that adds diversification to the types of population in the area. And it broadens the mix of retailers you can target."
He said the 10,200-square-foot building was in good condition and had positive cash flow. But he and partner, Mike Holton, saw an opportunity for value-add by improving the tenant mix.
Smith said the improving demographics of the area, traffic counts and proximity to Sam's Club and chain restaurants should help them attract national franchise tenants and raise the profile of the center.
"The previous management underutilized the potential of the property," Smith said. "Most of the tenants are on short-term, below market leases. We plan to start turning over those units over the course of months, as opposed to having to wait years for the long-term leases to expire."
Smith said the multi-tenant building was constructed with a grease trap, but it has never had a restaurant tenant. Kelton would consider offering a conversion allowance for the right tenant, he said.
Nicholas Fouraker of 4Acre Commercial Real Estate was the listing broker and is working with Kelton on the marketing and leasing. He will publish a new brochure as soon as the exterior renovations are complete.
"We've already started some landscaping, and we're repainting," Smith said. "We're going to upgrade the signage on the building as we get new tenants."
Sunrise Bank provided $1.14 million in lender financing to Kelton Capital for the acquisition.