Thinking of hot retail markets, maybe Des Moines, Iowa, doesn't exactly come to mind. Then again, maybe it should. Pervasive Midwestern retail chain, Hy-Vee, has reportedly been drawing the eyes of investors in recent days, including those of local Des Moines real estate mogul, Richard Hurd. The man behind some of the region's largest retail moves has just acquired seven Hy-Vee-owned properties for $61 million, right after acquiring another seven earlier this spring for $82 million.
Acquired from American Realty Capital, a New York real estate firm, Hurd’s purchase includes two grocery stores in West Des Moines, and single stores in Cedar Rapids, Nebraska, and Kansas City. Two of the company’s convenience stores were also included in the $61 million purchase. As explained by article from the Des Moines Register, Hy-Vee will continue to lease the buildings and operate its grocery stores under Hurd’s ownership.
These purchases, the Des Moines Register explains, were the two largest of Hurd’s career, totaling $143 million, and that’s not all the mogul has shelled out trying to gather up a squadron of Hy-Vee stores. In total, Hurd Real Estate Services owns 18 Hy-Vee grocery stores and 12 Hy-Vee gas stations.
So, why choose Hy-Vee?
“They are a leader in their market, and we have a great relationship with them,” Hurd explained. In the past, company officials have revealed that Hy-Vee often uses that strategy of selling stores and re-leasing them from the new owners as a way to free up cash for operations.
Hurd also noted that Hy-Vee and other Midwestern properties are part of his strategy to offset the sale of properties in the Sun Belt, the area of the U.S. spanning from the Southeast to the Southwest. In the past year, Hurd said he has sold about 10 properties in that region, responding to West Coast investors driving up real estate prices.
“The Sun Belt markets have been very robust, so if we have an opportunity to sell there, we’ll sell,” he told the source. “So, we’re trying to bring things closer to home.”
Hy-Vee is a chain of more than 240 supermarkets, and employs over 82,000 people as one of the largest private employer in the state of Iowa. The company has annual sales over $9.3 billion.
Will we see more investors clamoring to be a part of the Des Moines real estate market as we head into 2017? Time will tell, and when it does, so will Deli Market News.