An upstart Sacramento real estate investment firm has made another purchase, buying a factory outlet center at a heavily traveled intersection that serves as a gateway to South Lake Tahoe.
Sutter Capital Group said Wednesday it had purchased The Factory Stores at the Y, an outlet center at the intersection of Highways 50 and 89 on the outskirts of South Lake Tahoe.
It marks the fourth significant purchase in a little more than a year for Sutter Capital, led by a group of 30-ish Sacramentans seeking unusual development opportunities. The first three deals were all in downtown Sacramento.
Burke Fathy, the firm’s managing partner, said the Tahoe purchase made sense despite a deep slide in the region’s tourism market sparked by the rise of tribal casinos in Northern California.
Tourism numbers “are coming back,” Fathy said, and the Y intersection is ideal.
“That’s always going to be the only way in and out of South Lake Tahoe from the Bay Area or Sacramento,” he said.
The 55,000-square-foot center had fallen on hard times and is about half full, Fathy said. The family that once owned the center lost it to lenders in a foreclosure proceeding three years ago. Sutter Capital bought it from C-III, a “special servicer” that is hired by lenders to deal with troubled debts. The price wasn’t disclosed.
Fathy said Sutter Capital is working with an architect and plans to spend money on a face-lift and a new name for the center.
“It needs some love, to say the least,” he said.
The deal comes as the south shore real estate market shows continued signs of life. The old Horizon casino is scheduled to reopen later this month as a Hard Rock resort, for example.
Sutter Capital’s previous purchases were in Sacramento. In November, the firm bought the former Pyramid Alehouse building at 10th and K streets. It plans to find a new restaurant tenant for the site. The firm also has purchased the RetroLodge, a quirky former Travelodge downtown that has been converted into offices, as well as the old Hall of Justice building near the downtown railyard.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.