Maria Venalonzo momentarily stepped away from her bustling kitchen and the growing line of customers queuing up to place their orders. She had a quick comment about the sale of Southgate Shopping Center, home to her restaurant, Venalonzo’s Tacos.
“I’m happy,” she said. “I like it.”
Several other tenants of Centennial strip mall echoed her sentiment following the announcement of the $7.73-million deal. They said they had already been contacted by email, phone or in person, by Arapahoe RHSW LLC, the new locally-based owner.
Built in 1980, the single-story buildings currently house 13 tenants, including a dry cleaner, a dentists’ office, a credit union, a shoe repair shop, a couple of personal care businesses and several restaurants.
“It’s a local gem of a neighborhood center,” Jon Hendrickson told the Centennial Citizen. Hendrickson is an executive director at Cushman & Wakefield, the real estate company that brokered the transaction.
A decade ago, Copper2 LLC acquired the 30,024-square-foot center — divided between two buildings on 3 acres near the intersection of South Yosemite Street and East Arapahoe Road — for $7.15 million, according to Arapahoe County records.
The demand for retail property, particularly “neighborhood convenience” businesses, like food, beverage and service-oriented retail is stronger than it’s ever been, Hendrickson said. In the first quarter of this year, the national shopping center vacancy rate, at 5.4%, was among the lowest rates since 2007, according to a Cushman & Wakefield report.
“The rent roll was great, and the buyer is going to, over time, add value through various physical and operational improvements,” Hendrickson said of the shopping center.
There’s an opportunity to improve curb appeal, perform general maintenance and fill the three suites currently sitting empty, for example.
That potential for change has some tenants feeling wary, however. There’s concern that rent might go up, of course. And Allison Vega, co-owner of Kpop Zone, mentioned the City of Centennial’s interest in redevelopment.
The roughly 40-acres at the southwest corner of East Arapahoe Road and Interstate 25, dubbed as Arapahoe Urban Center District No. 4, has long been identified as a place where something unique or exceptional could and should occur, according to a city staff report.
On Oct. 3, after virtual and in-person community meetings, the Centennial City Council approved a plan intended to guide development of Arapahoe Urban Center District No. 4. It will be used to evaluate site plans submitted to the city with the goal of creating a cohesive, pedestrian-oriented, mixed-use district. The Southgate Shopping Center, one of 23 properties in the district, is in the general subdistrict for which the plan envisions redeveloped buildings between three and eight stories high.
But the city’s plans are about when and if the property gets redeveloped. At this time, the city has not received any site plan applications for the Southgate Shopping Center or Arapahoe Urban Center District No. 4, according to David King, a city planner.
“It’s going to be a shopping center for a long time,” a representative from Arapahoe RHSW said in an interview. “Our job is to find tenants that work well within the center and that the neighborhood needs.”
For now, several tenants mentioned that they’re enjoying the network effect of being in this particular shopping center even with the handful of vacancies.
Avi Koinov, owner of The HairDoc Barbershop, said it is the best location he’s ever worked at. Being just a few doors down Venalonzo’s Tacos, Paradise Cleaners and First Watch has brought in walk-in traffic that’s rounded out the client list he brought with him when he opened in the shopping center two and a half years ago.
“An amazing spot,” he said.
Lisa Hodge, co-owner of Spray Tan Beauty Boutique, pointed out the accolades various tenants have garnered. Venalonzo’s Tacos took the top spot in Denver Gazette’s 2024 Taco Tournament. Hong Kong Station landed on Westword’s 100 Best Denver Restaurants We Can’t Live Without list. Hodge’s own business picked up Best Tanning Salon 2024 from Inbound System’s Best of Mile High program.
Because they’re focused on customer service and on being good at what they do, the shopping center’s various tenants bring “tons of people,” according to Hodge, which is good for all the businesses leasing space at Southgate.
“This is a great strip mall,” Hodge said. “Lots of activity, great neighbors.”