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Sugar House Center is sold

Local firm Dees Inc. buys the 17-acre shopping complex

SHARE Sugar House Center is sold

Sugar House Center, the 17-acre shopping complex at 2290 South 1300 East that took nearly a quarter-century to develop, has been sold to a local investment group.

Selling price was not disclosed, but seller Montford-Apollo Sugarhouse LP, the "owning entity" of Dallas-based developer POB Montgomery, said last fall when it placed the property on the market that it was asking $27.5 million.

Buyer was Dees Inc., a local investment firm that was launched 70 years ago when Dee Anderson opened a nine-stool hamburger restaurant in Salt Lake City that in the 1950s and early '60s grew into a large chain whose "Deeburger Clown" was as well-known locally as Ronald McDonald.

Today, the company, closely held by Anderson's children and grandchildren, operates 12 Dee's Family Restaurants and also owns shopping centers.

"About half our income comes from the restaurants and half from the shopping centers," said Mike Olsen, Dee's president.

Although he wouldn't divulge the price paid for Sugar House Center, Olsen did concede that it was less than the original asking price of $27.5 million.

Why buy it?

"We think it's a great location, and the demographics of the area match up well with it," said Olsen. "The freeway (I-80) is close by, and we have some good major tenants to anchor it. Plus, we think it has some upside potential in terms of rent rates, bringing in new tenants and making improvements."

The 247,000-square-foot center is currently 97 percent leased, with a variety of national retail and restaurant chains, including Michael's, Toys-R-Us, Nordstrom Rack, Red Lobster, Olive Garden and Taco Bell, along with a 10-screen Cinemark Theater complex.

It also doesn't hurt that another local developer, the Boyer Company, recently completed The Commons, an upscale shopping center immediately to the north of Sugar House Center that considerably enhanced the area as a destination marketplace.

The deal was negotiated by Kent Christensen, a senior associate with the Salt Lake office of CB Richard Ellis, along with Craig Thomas and John Jones, also CB associates.

"This is one of the largest investment transactions for a single property ever to occur in Salt Lake City," said Christensen.

The property was put up for sale by Montgomery last September. The fact that it sold in 10 months was described by a CB spokesman as "very quick considering the size of the property."

Why sell a nearly fully leased shopping center? Christensen said POB Montgomery made a seven-year commitment to manage the property when it bought the center out of bankruptcy in 1992. That commitment had ended, and the company was ready to move on.

Sugar House Center was originally developed in 1990 by Clark Financial Corp. and its president Spence Clark after being in the planning stages for 23 years. At the time, it was the first major development in Sugar House since 1965.

But before it was completed, Clark Financial went into bankruptcy and was acquired by POB Montgomery.

E-MAIL: max@desnews.com