Strategy

• Prado identified an underutilized site with a grocery store that was planning to vacate
• Through an attorney relationship, Prado was able to purchase the site off-market

Execution

• Acquired two separate interests from feuding family members
• While the site allowed for a large mixed-use development, Prado felt that the re-lease of the building created the highest risk-adjusted return
• Prado adaptively reused the building, which was renovated, subdivided, and re-tenanted with Trader Joe’s and CVS
• Obtained Formula Retail Conditional Use approval within three months of initial filing
• Updates included adding an elevator and stairs to improve vertical circulation from the lower parking area to the store and renovating the facade

Results

• Prado achieved the highest grocery and drug store rents in the market for both Trader Joe’s and CVS
• Prado was also able to reduce tenant control to allow for optionality of future development (max of 25 years)
• Trader Joe’s was operational within 12 months of Cala Foods’ departure
• Prado successfully refinanced the property in 2012 and returned all invested equity