High-end variety retailers and some well-known national brands, combined with successful restaurants, have made The Promenade Shops at Briargate a magnet for consumers.
High-end variety retailers and some well-known national brands, combined with successful restaurants, have made The Promenade Shops at Briargate a magnet for consumers.
High-end variety retailers and some well-known national brands, combined with successful restaurants, have made The Promenade Shops at Briargate a magnet for consumers.
High-end variety retailers and some well-known national brands, combined with successful restaurants, have made The Promenade Shops at Briargate a magnet for consumers.

In a hushed real estate deal, an Illinois-based investment group purchased the high-end and successful Promenade Shops at Briargate in August for more than $96 million.

“I have been thinking on and off for five years about this particular asset,” said Andrew Miller, president and CEO of Miller Capital Advisory Inc., which co-owns Skokie, Ill.-based property buyer Institutional Mall Investors LLC. “It just came about this year, and we found a way to make a transaction work in both [the seller’s and] our best interests.”

Documents from the El Paso County Assessor’s Office indicate that the 29.17 acres of partially developed land located along Briargate Parkway, which includes the 231,847-square-foot shopping center, sold Aug. 16 for $96.8 million. Although Miller said his company wasn’t looking specifically at Colorado Springs for an investment opportunity, the population growth and steady economy of the Pikes Peak region made the asset stand out in a part of the country he was eyeing.

“We’re an investor in fashion retail properties; sometimes it’s malls, sometimes lifestyle centers like this one,” Miller said. “We have desired a position somewhere along the Front Range for some time.”

Institutional Mall Investors, a co-investment venture between Miller Capital Advisory and the California Public Employees’ Retirement System, has a portfolio of assets including nearly 20 million square feet of retail space and more than 1 million square feet of prime office space across 16 different states, according to MillerCapitalAdvisory.com. This is the group’s first property in Colorado.

“CalPERS is huge,” said UCCS Economics Department Chairman Dale DeBoer. “That’s going to be one of the biggest investors in the country. They buy all kinds of things all over the world, because they’re just too big not to.”

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Miller’s comments supported DeBoer’s assessment.


We are a very, very deep-pocketed investor.” 

– Andrew Miller,
president and CEO of Miller Capital Advisory Inc.


“We are a very, very deep-pocketed investor,” Miller said, adding that its combined property holdings are worth more than $5 billion.

The developer and seller of the Promenade Shops is Memphis, Tenn.-based Poag & McEwen Lifestyle Centers LLC. That company, which has built close to a dozen “lifestyle centers” across the U.S., purchased the vacant land for $7.3 million in 2002 and completed the center’s buildout the following year, according to records from the assessor’s office.

Poag Shopping Centers will continue to oversee the property’s leasing and management operations, said Promenade Shops General Manager Deanna DeLarge.

Although representatives from Poag & McEwen declined to comment on the sale, Miller said his company is in good standing with the seller and was given permission to speak on behalf of both companies. Miller explained that because the two firms had been planning a potential property deal for some time, the need for a real estate broker was moot, resulting in a quiet, low-key exchange.

“When you’re trying to make the transaction the way we did it … there was no reason to publicize that we were trying to do it,” Miller said. “I think it was just a very normal and customary way of doing things. Since there was no broker involved, we didn’t see it necessary to publicize it until we were across the finish line.”

Success during recession

The investment group became interested in the retail center during the throes of America’s most recent recession, during which Miller said the Promenade Shops maintained a notable level of success by catering to higher-income clientele.

“We went through some pretty tough times in 2008 and 2009, and they were able to keep the occupancy relatively full,” he said. “The property had really good bones and a really good position in the market.”

Since Poag & McEwen opened the Promenade Shops on Aug. 15, 2003, it has attracted nearly 60 vendors and currently has a 96-percent occupancy rate, according to DeLarge. The center’s website, PromenadeShopsatBriargate.com, also states that “160,954 people with an average household income of $100,000 live within 10 miles of Briargate” and “more than 100,000 vehicles pass through [the] area each day.”

UCCS Professor of Finance Tom Zwirlein said that investors and investment firms often like to spread the risk in different markets with different assets, “taking advantage of lower prices in areas that have been depressed and are now on the rise” — a technique he compared to that of Warren Buffett.

“There’s nothing unusual about that investment,” DeBoer said. “Bond markets have been fairly depressed because of interest rates and the stock market can be volatile in terms of risk. I have seen growth in various types of real estate investments.”

Many investors look to real estate as a source of steady income, Deboer said — even if the value of the property doesn’t appreciate, money comes in from rents and other revenue.

Zwirlein agreed, adding that it’s fairly common for resourceful national investment groups to purchase promising properties in various markets as real estate bounces back after an economic downturn in hopes of diversifying their portfolios. And while the Promenade Shops has shifted from one out-of-state owner to another, rather than falling into local hands, he said that’s not necessarily a bad thing.

“It brings capital into the area,” he said, especially if they spend $2 million in the local market on renovation to bring the property up to their standards. “The negative would be if they started collecting rents and collecting revenue that just go back into their portfolio.”

Local investors may not have the resources to make improvements or attract businesses the way that larger entities might, Zwirlein said. And just because they’re local, doesn’t mean they will be spending their money here.

“They’re trying to buy assets at a low value and as the economy improves — with more consumer demand — the vacancy rates go down, the rents start going up and these investments start paying off,” Zwirlein said. “They can diversify their portfolio [this way]. If they focus too much on one area, they can get really burnt out on their investments.”

With real estate and retail markets on an incline, this certainly could be a good time to invest in such commercial properties, Deboer said.

“The trend has definitely been that vacancy rates have been declining,” he said. “Colorado itself has been one of the stronger areas for that area in the market. Colorado made it through the recent economic downturn relatively unscathed.”

Future of The Shops

Miller is optimistic about the future of the Promenade Shops at Briargate. With both the Denver and Colorado Springs metropolitan areas expanding south and north respectively, he imagines the eventual emergence of a “megalopolis” — thus creating exponential market growth and a more robust clientele base. With that in mind, Miller and his company don’t plan to change much about the current physical and operational structure of the development.


Our goal is to bring more, better brands to offer to the core customers …”
— Miller


“The center is basically what it is: We’ll gradually improve it over time and some day, somehow, we may do some improvements and perhaps look at expansion,” Miller said, adding that they are in talks with vendors looking to occupy space at the Shops. “Our goal is to bring more, better brands to offer to the core customers that Briargate is now serving.”

Most recently, the lifestyle center has attracted national retailers including quality clothiers J. Crew and Pendleton Woolen Mills, and high-tech boutique Brookstone, which are scheduled to open this month.

As developer Gary Erickson’s planned Copper Ridge shopping center continues to face challenges in development, this is an interesting time for retail developments on the city’s far north side. But Miller said that even if Copper Ridge becomes a successful destination for spenders along the Front Range, he is confident that the Promenade Shops at Briargate will continue to thrive as a high-end spot for eating and shopping in Colorado Springs.

“We’re always concerned when there is potential new competition,” Miller said. “But we think we’ll have our market position, which is a narrower market segment among upper-income households.”