In August 2014, RockStep Capital purchased Uptown Hutch in Hutchinson, Kansas, with three other malls. By leveraging our combined 286+ years of experience and value creation strategies, we increased the property’s value from its $2MM acquisition price to over $15MM of added value.
The Investment
Upon acquisition, Uptown Hutch was a 400,000-square-foot center with a 60% vacancy rate and approximately $150,000 of NOI.
The Progress
RockStep negotiated and retained a 20,000-square-foot office tenant and began backfilling vacancies. The vacant Dillard’s was replaced with T.J. Maxx, Harbor Freight Tools, Ulta Beauty and Dollar Tree. A 56,000-square-foot Dunham’s Sports replaced most of the vacant Sears. While decreasing the property’s vacancy rate, we also reduced taxes and utility costs by 44%. RockStep also obtained a $11.6MM municipal TIF, sales tax and CID incentive package the funds of which were used to redevelop the property. At this time, Uptown Hutch has achieved over $1.2MM of NOI.
In Phase II of the project, we executed the lease and began construction on Ollie’s Bargain Outlet, which opened in April 2021. RockStep also backfilled 35,000 square feet of the property’s former JCPenney with Hutch Vintage Market. Upon Phase II’s completion, the project had $1.5MM of NOI.
Phase III entails pursuing backfill opportunities with Burkes Outlet, Five Below and Ross, which are set to be completed in summer 2025. In addition, the mall will be closed, and all tenants will face outside. By the end of Phase III, Uptown Hutch is predicted to possess approximately $2.1MM of NOI.
The Results
By significantly reducing expenses and backfilling vacancies, RockStep Capital increased Uptown Hutch’s NOI from $150,000 to approximately $2.1MM in 5+ years. With approximately $600,000 to $700,000 of excess cash flow after debt service, the project’s value following the completion of Phase II is estimated to exceed $15MM in added value.
RockStep saw a 60% occupancy rate as an opportunity rather than an obstacle. By obtaining 10 new tenants, we achieved significant property growth and revitalized Uptown Hutch by providing unique, dynamic consumer experiences within the Hutchinson, Kansas market. We’re revitalizing retail the RockStep way and plan to continue doing so for years to come.
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