Investment Overview

Marcus & Millichap is pleased to present for sale - Mad Creek Centera 21,672-square-foot, Hy-Vee-shadowed shopping center located in Muscatine, Iowa. The subject property is one of the region’s premier strip centers with original construction dating back to 2004. The subject property is 100 percent leased and the rent roll consists fully of national brands which include Dollar Tree, T-Mobile, Impact Life, Sally Beauty, H&R Block, and CATO. Mad Creek Center has demonstrated extremely strong historical occupancy where 72 percent of gross leasable area is occupied by original tenants dating back to 2004, and 20.6 percent of gross leasable area occupied by tenants who have been at the site since at least 2012. The latest lease signing in 2023, which represents the remaining gross leasable area, was signed at 45 percent higher rent than the centers average – representing immense mark-to-market upside capabilities via lease extension or opportunistic backfill efforts. Despite being arguably, the top strip in the region, Mad Creek Center offers extremely modest rents that are well below market - averaging only $13.37 per square foot. The well-positioned below-market rent offers a clear path to meaningful rental growth, and a major hedge against relocation risk in one of Iowa’s lowest vacancy markets (0.3 percent) which has also seen virtually no new construction over the past five years. In its current state 25 percent of gross leasable area lacks option terms, 21 percent only has one option remaining, and weighted average lease term remaining is 2.9 years, which further emphasizes the tangible upside for ownership. Weighted average tenure at the site exceeds 19 years, highlighting deep commitment and success at the site, the strength of the location, and the outdated/below market nature of in-place rents. All leases are structured on a landlord-favorable triple-net basis, with tenants reimbursing taxes, insurance, common area maintenance, and the majority of third-party management costs. This structure minimizes expense leakage while providing investors with a passive, stable income stream and operational simplicity given the center’s low tenant count configuration. Mad Creek Center sits on an oversized 5.75-acre parcel and is strategically situated at the signalized intersection of Hwy 61 and 2nd Ave which see over 20,400 vehicles per day (Muscatine’s busiest route). Its location serves as a critical link between the established retail corridor, the regions dense residential region, and travelers heading to and from town. High barriers to entry—including limited land availability and restrictive zoning—have resulted in minimal new competitive retail development, and total regional new supply since 2015 represents only 0.45 percent of total retail space. With scarce competition due to the aforementioned aspects, which have been further exacerbated by high building costs, and a major waiting list of national/regional tenants trying to enter the market, Mad Creek is positioned as the go-to center if space is ever available. Immediate demographics are stable and mature with population counts of 4,047 within one mile, 23,084 within three miles, 26,341 within five miles, and an average household income in excess of $90,000. Existing retail/points of interest surrounding the subject property includes Menard’s, Walmart, Aldi, Blain’s Farm & Fleet, Slumberland, Harbor Freight, O’Reilly Auto Parts, McDonald’s, Starbucks, Dunkin’, Culver’s, AutoZone, Arby’s, Jersey Mike’s, and Wendy’s. Muscatine is the county seat of Muscatine County, and is part of the Quad Cities-CSA which has over 475,000 residents. Muscatine is located on the border of Iowa and Illinois and 175 miles from Chicago.