See work in progress at Modesto’s Century Center, Salida towers
Two high-profile Stanislaus County properties are reaping the benefit of having new, local ownership.
Modesto-based Graceada Partners has snapped up the Northpoint Office Towers business park in Salida, the side-by-side buildings that house the University of Phoenix and San Joaquin Valley College. Last fall the fledgling real estate investment group announced its purchase of Century Center in partnership with New York-based commercial real estate firm Somera Road, Inc.
Improvements are now beginning on east Modesto’s Century Center, starting with resurfacing the parking lots and then moving on to a full facade renovation to modernize the once-bustling shopping destination. Work on the exterior is expected to begin toward the end of the year, said Joe Muratore, who helms Graceada Partners with his fellow NAI Benchmark principal Ryan Swehla.
Work will begin soon as well on the Salida properties, which sit next to each other along Pirrone Road fronting Highway 99. The top floors of both buildings have been full shells or partial shells since they were built in 2008. Muratore said his group closed escrow on the property three months ago, and already has a new tenant for the southern tower’s first floor, which has been vacant for about two years.
A professional services company will move into that first floor space by the end of the year once the renovations are done. The rest of the south tower has University of Phoenix on its second floor and staffing agency Aerotek taking up the finished part of the third floor. Both the towers’ lobbies will be updated, and the third floors are being renovated on spec — meaning they’re being built without a confirmed tenant yet. But Muratore said he is confident they’ll be filled soon.
The Salida purchase is the first from Graceada Partners’ Fund One, which raised $12.5 million across 43 local investors. The business park was purchased for $10.35 million, and Muratore said they plan to invest another $2.5 million in updates, renovations and improvements. That includes building out the north tower’s entirely vacant shell of a third floor, which has been empty for over a decade.
“Our focus is on adding value to buildings in great locations, generally (for projects) over $10 million. People are generally afraid to spend more than $10 million in the Central Valley,” Muratore said. “People willing to invest that capital tend to go to L.A. and San Francisco. We are local and have been doing commercial real estate in the valley for 15 years. We’re good at filling buildings.”
And they’re proving that with Century Center. Built in 1979, it was one of the city’s premiere shopping centers until major retailers began leaving in the last decade. Anchor store Gottschalks went out of business in 2009 and another anchor, Raley’s grocery store, moved in 2012. Starbucks and Blockbuster Video have also since exited.
Shortly after taking over the center, the Graceada Partners began trying to woo Trader Joe’s to the center. Modesto already has a very busy — seriously, just try shopping there on a Sunday — Trader Joe’s across from Vintage Faire Mall in the northwest part of town. Muratore’s group went as far as erecting signs asking passersby to contact the specialty grocery chain to open a second location in the city.
Those signs have since come down, and Muratore said he believes more than 1,000 people contacted the company lobbying for the store.
“I know we flooded Trader Joe’s with interest. But they only open 10 stores a year. And they said, ‘You’re on our list, keep in touch,’” he said. “So I know East Modesto is on their list. But I don’t know what number we are or if we’re on the Top 10 yet.”
But other changes are confirmed at the center. In January the indoor go-kart racetrack MB2 Raceway, which has been operating in a portion of the former Gottschalks space since 2009, was asked to leave by the new ownership. In turn, 28,000-square-feet of that space is being filled by Golden Valley Health Centers, which operates clinics across the region.
The health care provider is bringing a new program aimed at helping seniors into the space. Once open it will be the first PACE program (which stands for Program of All Inclusive Care for the Elderly) in the county and is expected to bring between 60 to 80 jobs once fully operational and eventually serve between 400 to 600 patients a year. It is slated to open in July 2020.
Next door to Golden Valley’s PACE clinic will be Satellite Healthcare, which is opening a kidney dialysis center in another portion of the former Gottschalk’s space. Two new restaurants, a Mexican eatery and Filipino place, have also signed leases and are coming to the center soon.
Other longtime tenants, like Torii Japanese Restaurant and the Roundtable Pizza both plan to do their own renovations.
One of the center’s biggest vacant spaces, the former Raley’s site, remains without a tenant. But Muratore is confident that will change soon, too. Raley’s had been paying the lease on the space since it moved out of the complex seven years ago to Village One, and had not allowed another grocer to take over the space. But that lease ended in May and now the new owners are free to show it to other supermarket companies.
Muratore said they’ve already had a couple tour the space, and said within a year he will have the old Raley’s filled.
“Century Center is being reborn now, but that vision will be seen in next 8 to 12 months,” Muratore said. “It’s going to be a completely different center then.”