Some retail centers are built for foot traffic. Others are built to endure. But Southgate Shopping Center? It’s built for both.
Located in the resilient and rapidly growing city of Lake Charles, Louisiana, Southgate is a 166,325-square-foot grocery-anchored shopping center that blends the best of both retail worlds: long-standing tenant stability and immediate value-add potential. Following over $33 million in structural and aesthetic upgrades, the center now stands as one of the strongest retail offerings in the Gulf Coast region, and it's open for investment.
Positioned at a high-traffic intersection just one mile from the Prien Lake Mall (a regional draw attracting over 3.7 million visits annually), Southgate has the visibility, tenant mix, and economic tailwinds that forward-thinking investors seek.
This isn’t a turnaround story. With 90.8% occupancy and a roster of national and regional credit tenants, Southgate is already performing well. Anchored by Market Basket, a regional grocer with a 40+ year tenancy, and complemented by established names like Office Depot, Dollar Tree, Books-A-Million, FedEx Office, Oak Street Health, and Cricket Wireless, this center has a durable rent roll that thrives on recurring consumer traffic.
What sets Southgate apart is its exceptionally low in-place rents. This property averages just $12.11 per square foot, significantly below market leasing comps in the $16 to $24/SF range. This discrepancy represents a clear path to meaningful rent growth over the hold period without needing major structural repositioning.
After being impacted by Hurricane Laura, Southgate was completely reimagined and rebuilt. The ownership team invested more than $33 million in comprehensive capital improvements, including:
These improvements enhance curb appeal and tenant retention and drastically reduce near-term capital expenditure risks for the next owner. Southgate is now a Class B asset in a historically underserved market, offering the look and feel of new construction with the pricing advantage of an existing product.
The Southgate deal hits the mark for investors seeking a transparent, predictable return profile. Here's a snapshot of key financial metrics:
Southgate will be acquired free and clear of debt, enabling greater financing flexibility and reducing exposure to interest rate fluctuations. A bank loan at 7% interest-only for five years has already been modeled for conservative underwriting, yielding a 1.6x DSCR in Year 1.
At the heart of Southgate’s value-add potential lies 14,530 square feet of vacant space, spread across four suites in highly visible, front-facing locations. These units are second-generation (meaning lower tenant improvement costs) and are projected to lease at $16–$20/SF, depending on use.
Projected lease-up assumptions span June to December 2027, although accelerated lease-up would materially improve investor returns. This is a center where leasing efforts are about timing, not transformation. The market demand exists. It’s about activating it with the right tenants.
Additionally, Office Depot, which currently pays a below-market rent of $8.25/SF, has a lease expiring in 2029. If they vacate, the space can be re-tenanted at much higher rates. If they renew, the rate increases to $9.50/SF, further improving income certainty. The underwriting conservatively assumes they vacate — giving upside to either outcome.
With an average tenant tenure of 25.5 years and an average WALT of over 5 years, Southgate’s rent roll offers a level of stickiness that's hard to replicate. Tenants like Market Basket (lease through 2033), Books-A-Million (2030), and Oak Street Health (2035) are not just rent payers — they're destination drivers.
Many tenants fall into the “e-commerce-resistant” category, which means that they offer healthcare, office services, and community-driven goods. This protects the center’s income profile in uncertain retail environments and ensures continued foot traffic.
Placer.ai data also confirms that many of Southgate’s tenants outperform national benchmarks, which is a strong validation of this location’s draw.
Lake Charles is more than a backdrop. It has become a growth engine. As one of Louisiana’s largest metro areas, the city is experiencing a resurgence powered by diversification into healthcare, education, energy, and gaming.
The city is also home to McNeese State University and major casinos like Golden Nugget and L’Auberge, adding year-round traffic and supporting a healthy retail ecosystem. With rising household incomes and a growing residential base, the demand for everyday retail continues to climb. Southgate is right in the path of that growth.
Over the 5-year hold, Southgate’s NOI is projected to grow from $1.69M in Year 1 to $1.93M+ by Year 5, with strong, stable cash flow in between. Conservative underwriting assumes a sale at an 8.25% cap rate, reflecting stable regional pricing and mitigating downside risk in a higher-rate environment.
Multiple sensitivities were modeled, including:
Across the board, IRR and equity multiple remain strong, with upside potential depending on execution timing and tenant retention outcomes.
Southgate is being offered by our team at RockStep Capital. We are a vertically integrated retail real estate sponsor with deep experience in secondary and tertiary markets. Since we founded in 1997, our highly skilled team has acquired or developed more than 9.7 million square feet of shopping centers across 11 states.
Our track record includes:
Led by Andy Weiner (Founder) and Dmitry Lyamichev (CIO, formerly of Blackstone’s ShopCore), the team combines Wall Street-level discipline with hometown market know-how — making them uniquely suited to execute on Southgate’s potential.
RockStep is offering Southgate through two investment vehicles designed to suit different investor preferences:
Investors can choose between concentrated exposure to a known winner or a diversified strategy with enhanced terms.
If Southgate sounds like the right fit for your portfolio, now’s the time to act. Here's what’s ahead:
If you want to understand the investment thesis better and hear the "why now" directly from the source, you can watch the webinar replay recently recorded by Andy Weiner, where he walks through the full opportunity, tenant strategy, and upside potential.
<< WATCH RECORDING HERE >>
Prefer to have a one-on-one conversation with a member of the RockStep team? Reach out to RockStep’s Investor Relations team at jroberts@rockstep.com or call #713-904-5096.