A shopping center anchored by Price Chopper in Colonie sold for $20.8 million – a $5.55 million increase over what the property sold for just 2 1/2 years ago.
The sale of the 153,500-square-foot Colonie Plaza at 1892 Central Ave. is a sign of how grocery-anchored shopping plazas with a strong occupancy rate can increase in value even with the surge of online retail sales during the pandemic.
“People were not going to sit-down restaurants as much however they were shopping at Price Chopper and Big Lots and Dollar Tree more,” said Faraz Khan, one of the property sellers. “I think in general that brought more traffic to the plaza.”
Khan and his relatives made a big investment in the shopping plaza in April 2020, just a month after the Covid-19 pandemic hit New York and people were hunkered down in their homes, fearful of catching the virus and unable to shop at businesses forced to close because they were deemed unessential by state government.
“We felt pretty confident in the long run we would weather the storm,” Khan said. “I knew the market, knew the area. I felt good about it overall but we bought it at a time of uncertainty.”
Price Chopper and several other tenants at the plaza — Big Lots, Dollar Tree and Mobility Works, which sells wheelchair-accessible vans — were considered essential and remained open.
Others, such as a former hair salon and Retro Fitness, had to close. The landlord gave those tenants a discount on rent to help them through the lean times. A new salon has since opened.
Improvements were also made to address what had been deferred maintenance by the previous owner on the roof, parking lot, security systems and retention ponds.
The occupancy rate today is 98%, a few percentage points higher than when Khan and his relatives bought the plaza. A hookah lounge is also opening soon, and a deal appears to be coming together for the former Trustco Bank.
“For all intents and purposes, next month i think they’re going to be at 100%,” Khan said.
Net operating income went up more than 20% by filling vacancies, working with tenants and increasing some rents.
The property was marketed to out-of-town investors by RedMark Realty LLC of Clifton Park, which specializes in retail centers.
There were multiple offers.
“Our bread and butter has always been leasing, but throughout the last two years to three years, the investment sale side of our business has been very significant,” said Alex Kutikov, principal at RedMark. “Investment sales has really been a driving force, especially coming out of Covid.”
The capitalization rate on the deal wasn’t available.
The buyer was Colonie Plaza Central Avenue Inc., which consists of business partners Hari Godhwani of Middletown and Sheikh Ullah, an attorney on Long Island.
Godwhani, 76, is a retired chemist whose career included working for the New York City Water Department.
He retired at 55 and started investing in commercial real estate, including a mixed-use building in Middletown, a motel in Warwick and apartments in Newburgh.
His friend, Ullah, wasn’t an investor in those deals but suggested they look at the Colonie Plaza together.
“We thought it would be a good investment,” Godwhani said.
The mortgage on the property hasn’t been filed yet in the Albany County clerk’s office.
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