Iowa Mogul Richard Hurd Buys 7 Hy-Vee Properties for $61 Million
DES MOINES, IA - When you think of hot retail markets, maybe Des Moines, Iowa, isn’t the first place that comes to mind. Then again, maybe it should be. Large-scale Midwestern retail chain, Hy-Vee, has reportedly been drawing the eyes of more 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.
Purchased from American Realty Capital, a New York real estate firm, Hurd’s acquisition includes two grocery stores in West Des Moines, as well as stores in Cedar Rapids, Nebraska, and Kansas City. Two of the company’s convenience stores were also included in the $61 million purchase. According to an article by 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 says, 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 Hy-Vee?
“They are a leader in their market, and we have a great relationship with them,” Hurd said of Hy-Vee. 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, generally meaning 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 the region as a response 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 AndNowUKnow.
