Canyon-Johnson Urban Fund LLC is reaping the benefits of its retail development projects. It sold two properties in the past week and is closing its second fund -- which, at $600 million, is twice as much as its first round of investment in 2001. The new fund reportedly was oversubscribed at $1 billion.
Canyon-Johnson, a joint venture between Magic Johnson's Johnson Development Co. and Canyon Capital Realty Advisors, expects to announce its first developments from Fund II within 30 days, says Bobby Turner, managing partner and co-chair. Most will be mixed-use with some retail space. Expect to see a new project with partner Northern Realty Group in Chicago, two blocks from their State Place development. And, says Turner, Canyon-Johnson is looking for another Milwaukee location following the sale Friday of Midtown Center there with partner Boulder Venture LLC. Inland Western Milwaukee Midtown LLC bought the newly constructed shopping center for $53 million.
The bidding on Midtown Center was competitive with at least 10 institutional investors vying for the property. Kimco Realty Corp., Prudential Real Estate Investments, Morgan Stanley and American Realty Advisors all showed interest in the development, which includes 320,000 square feet of gross leasable space and an 11-acre parcel of land for possible future development.
Inland says it has no plans for expansion at this time. Major tenants include Wal-Mart, Pick 'n Save, Foot Locker, Payless Shoe Source -- and a Milwaukee Police Department substation and a 6,600-square-foot Concordia University satellite. A shadow Lowe's anchor was not included in the deal.
Two days earlier, Canyon-Johnson and partner Bond Cos. sold the recently completed Sunset+Vine mixed-use development in Los Angeles, with 87,000 of ground-floor retail, 300 apartments, an 833-space parking garage and 19 billboards for $165 million to SSR Realty, which has in that short time been acquired by BlackRock Inc.
Last year, Canyon-Johnson sold two properties -- the 605,000-square foot Severance Town Center in Cleveland Heights, Ohio and Sunset & St. Andrews in Los Angeles, which included 19,000 square feet of retail.
Turner said it doesn't have any developments on the sales block at this time. A typical investment horizon for the fund is three to five years.