Liberty Crossing Centre has been sold to an Edmonton-based real estate investment trust.
Melcor REIT (TSX: MR.UN) confirmed on Monday that it’s purchased the shopping centre on the southeast corner of Lantern Avenue and Liberty Street, in Red Deer County. Existing tenants on the 4.72-acre site are Ashley Furniture Homestore, Wolverine Guns & Tackle, Canadian Closet, SML Entertainment and The Hideout restaurant and pub.
A news release issued by Melcor said the purchase price was $13.2 million and the deal scheduled to close Dec. 3.
“We are excited to enter Red Deer with the acquisition of Liberty Crossing,” said Darin Rayburn, CEO of Melcor REIT.
“This property complements our portfolio and expands our retail offering to the growing Red Deer market, an important geographic and economic connector in Alberta.”
Operating since May, Melcor REIT owns, manages and leases retail, office and industrial properties in Alberta, British Columbia and Saskatchewan. With Liberty Crossing, its portfolio grows to 29 properties with approximately 1.69 million square feet of leasable area.
Liberty Crossing Centre has been under the control of a restructuring officer since August 2012.
That’s when the property’s owner, Liberty Crossing Limited Partnership (LP), and related companies obtained court-ordered protection under the Companies’ Creditors Arrangement Act.
Liberty Crossing LP purchased Liberty Crossing Centre in October 2008 from Avenir Diversified Income Trust for $14.2 million, with $9.3 million of this amount coming from First Calgary Savings & Credit Union Ltd. and the balance from other sources.
Liberty Crossing LP was part the Harvest Group of Companies, which raised more than $266 million from investors between 2004 and 2010, with Liberty Crossing LP generating $7.5 million from 222 investors, according to an affidavit filed by Harvest founder and Liberty Crossing LP director Ronald Aitkens in connection with the Companies’ Creditors Arrangement Act application.
Three stores in Liberty Crossing Centre — The Bedroom Shoppe, The Living Room and Kitchen and Patio — closed in 2009. Aitkens said this undermined the income-generating potential of the property.
After exploring the possibility of refinancing the shopping centre, Liberty Crossing LP’s restructuring officer concluded that a sale was the best option.
The Melcor REIT deal should net nearly $13 million, although less than $3 million is expected to be available for Liberty Crossing LP investors after the claims of First Calgary Savings & Credit and other creditors are paid.
A majority of Melcor REIT’s shares are held by Edmonton’s Melcor Developments Ltd. — an active developer in the Red Deer area. Current Melcor Developments projects include Clearview Market Square, McKenzie Industrial Business Park and several residential subdivisions.
hrichards@www.reddeeradvocate.com