Next Realty closed on the sale of Hillside Terrace Shopping Center in Delafield, Wisconsin, in late 2025 for $5,500,000 – a 40% increase from its original purchase price. Acquired in October 2019 from a special servicer, Next Realty successfully navigated challenges associated with purchasing a Real Estate Owned (“REO”) property, including limited due diligence and incomplete lease documents.
Additionally, Next Realty managed notable leasing turnover. In late 2024, the largest tenant, JDJ Endurance, vacated four years early. After approximately nine months of downtime, Next Realty successfully backfilled the space with Callen Construction, a design firm specializing in custom kitchens and bathrooms. Over the past year, Pizza Hut also vacated the property due to a franchisee bankruptcy, and GameStop left due to weak sales; both spaces were actively marketed for lease.
Last fall, Next Realty received a compelling off-market offer from a local dentist seeking to owner-occupy the property, and the sale closed at the end of 2025. Over the five-year ownership period, the sale generated a favorable rate of return for Fund IX investors.
Next Realty drew on key takeaways from other recent retail investments – such as Kings Automall Shopping Center in Cincinnati, Ohio and 4600 Plaza in Harwood Heights, Illinois – to manage the investment from acquisition through favorable exit. For instance, Kings Automall focused on improving occupancy levels and managing lease expirations, while 4600 Plaza upgraded the building’s physical condition, diversified tenants, and increased rents to market rates.
“For projects like Hillside Terrace, we rely on our previous experience tailoring our strategy to the unique circumstances of REO properties,” said Marc Blum. “We execute our gameplan by addressing tenant credit risks, managing leasing turnover, and making capital improvements to backfill vacancies.”
The Hillside Terrace outcome emphasizes the benefits of Next Realty’s Multi-Solution® strategy of diversification and continued focus on preserving capital, managing downside risk, and generating consistent returns across varying market conditions.
