Portfolio - Case Studies

Frontier Mall, North Battleford, Saskatchewan

The Opportunity

 
Frontier Mall is an enclosed shopping mall in the North Battleford, Saskatchewan.  Strathallen purchased Frontier Mall in late 2006 on behalf of its value add fund: Strathallen Retail Property Fund 1 (SRPF1).  With a property vacancy of more than 10%, Strathallen recognized an opportunity to leverage off of its leasing expertise and increase property income.
 

Executing the Value Add Asset Plan

 
During the 2-year hold period, a lease was signed with the Regional Health Authority for 20,000 SF.  Strathallen then negotiated with Shoppers Drug Mart an expansion into a new 18,000 SF prototype store. Other leasing initiatives also included replacing a number of struggling tenants with stronger national tenant operators.
 

The Result

 
During the hold period Strathallen increased Net Operating Income by 85%, occupancy was increased from 89% to 98% and CRU sales per square foot in the mall increased by over 20%. The investment provided Strathallen Retail Fund 1 investors with a realized IRR of approximately 48% over a 2-year hold and a 1.7x equity multiple (pre-performance fees).