Knightboxx Village, a 21,450-square-foot shopping center in Jacksonville, Florida, featuring an adjacent Walgreens, was brought to market for $6,650,000 following the execution of a completed value-add strategy by ownership. The Matthews™ agent was engaged to facilitate the disposition, positioning the asset to attract buyers who could recognize both its in-place performance and its future upside potential, while enabling the seller to redeploy capital into assets closer to home.

 

Challenge

This asset presented a complex narrative for potential investors. The owners had already executed their initial value-add business plan and were looking to liquidate to reinvest in assets closer to home. However, the timing of the sale coincided with Walgreens transitioning to private credit, losing its investment-grade status. This shift created significant market trepidation regarding the long-term viability of the anchor tenant. Furthermore, the property featured a mix of legacy gross leases and below-market rents, requiring a buyer who could look past the immediate credit concerns to see the underlying real estate value.

 

Strategy

To overcome investor hesitation, the Matthews™ agent reframed the Walgreens credit situation as a significant “hidden” value-add opportunity rather than a risk. By highlighting that Walgreens was paying just $14.00 per square foot, well below the market average of $22.00 to $30.00 per square foot, the agent positioned a potential vacancy as a lucrative redevelopment or re-tenanting play that would substantially increase the property’s basis. Simultaneously, the Matthews™ agent emphasized the immediate upside within the strip center. The strategy focused on the Net Operating Income (NOI) growth potential through converting remaining legacy gross leases to triple net (NNN) and marking expiring below-market rents to current market rates. By creating a competitive bidding environment that targeted high-intent capital, the Matthews™ agent identified a buyer who valued long-term intrinsic real estate over short-term credit fluctuations.

 

Result

The marketing campaign successfully generated a highly competitive process, ultimately securing a 1031 exchange buyer group out of New York and California. This buyer recognized the long-term security of the location and the substantial upside in the rent roll. The Matthews™ agent facilitated a smooth transaction, closing the deal at 98% of the list price. The sale allowed the owners to successfully exit their position after maximizing their phase of the project, while the buyer secured a high-performing asset with multiple avenues for future revenue growth.