Country Club Plaza

The Challenge

JS Western Retail Investments (“JSW”) acquired a 23,760 sq. ft. vacant retail box in Chula Vista, CA, that was previously a CVS pharmacy. Despite its prime location at a busy intersection and shadow anchored by Carnival Supermarket, the property was dilapidated and there were numerous CC&R and lease restrictions that provided a substantial challenge. The owner of Carnival, knowing that we needed his approval to realize our objective to secure a tenant, was incredibly unreasonable with his demands.

The Solution

JSW recognized a unique opportunity to leverage its “med-tail” strategy which focuses on converting mid-box retail properties into more valuable medical uses. Before finalizing the acquisition, JSW received interest for the entire space from San Ysidro Health (SYH), a reputable non-profit medical provider. However, the owner of Carnival initially refused to approve the deal. JSW recognized that Carnival had an extremely negative predisposition toward landlords. Therefore, JSW aligned with SYH and inserted them as the primary contact. This strategy resulted in Carnival approving the deal and JSW finalizing a long term NNN lease with SYH.

The Result

The execution of this strategy yielded outstanding financial results for JS Western. The property, acquired for $4,200,000 ($177/sq. ft.), was ultimately sold to San Ysidro Health for $20,000,000. This transaction resulted in a 4.84x* Multiple on Invested Capital (MOIC) and a 61.1%* Internal Rate of Return (IRR), far exceeding initial projections. The successful sale underscored the effectiveness of JS Western’s “med-tail” strategy.

*MOIC = Multiple on Invested Equity. Un-audited. Prior performance is not indicative of future results. Potential investors should consult a professional prior to investing. Case Study is a representative transaction and is not indicative of the results of the aggregate portfolio. Scott Tiano served as sole or co general partner and was involved in varying capacities.