Woodbury Lakes, an upscale shopping center that opened five years ago but stumbled into foreclosure as the economy collapsed, will go up for sale on March 15. Investors could find a bargain.
"It's a high-profile property that has gone through foreclosure," said Bob Pounds, senior vice president of Welsh Cos. in Minnetonka, the company that manages Woodbury Lakes and is brokering the sale. "There's a sense out there that someone could buy the property at a price that will make them a lot of money."
There is no set price tag for the 50-acre property, Pounds said. That will be negotiated when a buyer emerges.
Pounds said he has already fielded many inquiries from buyers who see potential in the Woodbury property along Interstate 94 east of Radio Drive despite its recent troubles.
"There's still a lot of people out there who are active in making real estate investments," he said.
The last time Woodbury Lakes was up for sale, it was a sheriff's auction scheduled for October at the Washington County Government Center in Stillwater. The sale was called off when the property was turned back to the lender.
Cornerstone Real Estate Advisers of Hartford, Conn., bought Woodbury Lakes from the original developers for $99 million shortly after it opened, with more than two-thirds of the purchase price covered by loans. Cornerstone defaulted on the mortgage, owing $65 million in principal, prompting the foreclosure.
Whoever buys the property might do well to make it over from its high-end "lifestyle center" concept into a shopping area that might draw consumers with more moderate incomes from a broader area, said Jim McComb, a Minneapolis real estate and retail consultant.
"Woodbury as a city is kind of an anomaly in its trade area," McComb said. The city itself has a high average household income, but communities around it -- except for sparsely populated areas such as Lake Elmo and Afton -- have average incomes that don't align with the upscale tenants at Woodbury Lakes.
"They don't have enough of those households to make that kind of center click," McComb said.
The cost of such a makeover would be significant, he added, and would be figured into the price.
"For a purchaser who's interested in remerchandising and remarketing the center, it could be a real opportunity," McComb said.
Jim Anderson • 612-673-7199