The Arkansas Teacher Retirement System has sold the Southcenter Shopping Center in Hot Springs for $12.75 million to a company based in eastern Idaho, system Executive Director George Hopkins said Friday.
The sale of the shopping center to BVMC Hot Springs LLC of Idaho Falls, Idaho, closed Thursday, Hopkins said.
The 192,340-square-foot shopping center is located on a 20.28-acre site on Central Avenue near the Hot Springs Mall.
The center is 94 percent occupied and has 14 tenants, including Kroger, Hobby Lobby and Ross Dress For Less, Hopkins said.
The $12.75 million sale price for the shopping center exceeds the $12.5 million value of the property based on a Jan. 24 appraisal, he said.
The system purchased the property for $12.7 million in 2000.
The system made a profit on the property, although information about how large of a profit "is not available since it would require cash flow information over 14 years of operation that ATRS does not compile as an operational matter," Hopkins said. "The shopping center was not a home run, but over time held value and had a return one could expect in a [bond] holding."
Hopkins said that three other firms sent letters of intent to purchase the shopping center for $10.5 million, $11 million and $12 million, respectively.
In April, the system's trustees authorized the sale of the shopping mall for $12.75 million, after Hopkins told the trustees that it could either sell the shopping center or hold onto a good asset.
A representative for BVMC Hot Springs LLC could not be reached for comment by telephone Friday afternoon.
The teacher retirement system is the state government's largest retirement operation with investments valued at more than $14 billion and more than 100,000 working and retired members.
In June, the system's trustees authorized the sale of the system's other properties in Arkansas, except for the system's headquarters in Little Rock and the Victory Building in Little Rock, if the sales price is the most recent appraised value or higher.
The system's other properties in Arkansas include the Woodland Heights retirement center in Little Rock, the state Insurance Department building in Little Rock, the current Rose Law Firm building in Little Rock, and the state Department of Human Services buildings in Texarkana and West Memphis.
Under the resolution that the trustees adopted in June, they would have to approve any sale of system property in Arkansas that is for less than the appraised value. The resolution allows the system's staff to retain one or more of the system's existing brokers to market and represent the system based on existing manager agreements.
At that time, Hopkins told the trustees that properties directly held by the system "are more labor intensive and often don't have the attractive returns they once did, especially some of the older properties we've had 10 or 15 years.
"If they are sold, we just redirect that money into funds and other real assets [so it has] a better balanced portfolio [and] more diversification."
Metro on 08/16/2014