Nagle Plaza, the first acquisition for Next Realty Fund VII, was recently sold by an affiliate of Next Realty. The property, located at 6304-6310 Nagle Ave., is a 30,000 square-foot, mixed-use property consisting of retail space and a two-story office building. Located in a busy trade area at the intersection of Milwaukee, Devon and Nagle Avenues, the center is anchored by Walgreens, and shadow-anchored by Shop & Save Market.
The acquisition of Nagle Plaza represented the opportunity to execute a complex value-add strategy. Next initially acquired the defaulted first mortgage note, from a CMBS Special Servicer, and ultimately obtained fee title to the property at a 30% discount via a sheriff’s sale. Shortly thereafter, the property was refinanced with a new ten-year fixed-rate CMBS loan. That action allowed the return of approximately 75% of Fund VII investors’ initial equity.
Approximately one year ago, Next Realty finalized a long-term lease extension with Walgreens and subsequently refinanced the maturing CMBS loan with a short-term bridge loan that allowed prepayment flexibility. The final management piece before taking the property to market was the lease-up earlier this year of the remaining vacancy within the center.
Next’s investment in, and the ultimate sale of, Nagle Plaza demonstrated the firm’s ability to identify complicated investment strategies along with the patience required in executing the long-term management program that led to a successful disposition with a net return multiple of 1.42x to investors.