Main St Revitalization and Stabilization
Beginning in 2019, Rice Pegher strategically acquired and redeveloped ~32,000 sqft of commercial real estate and 8 apartments in the central business district of Zelienople, PA. The work created space for 15 new commercial tenants — boutique retail, food & beverage, and a range of office-based businesses — and added new market-rate housing in the heart of the corridor.
The portfolio was assembled gradually rather than in a single transaction, with each building underwritten on its own merits and brought through a tailored redevelopment plan.
Our in-house construction management team, in partnership with 3rd party contractors, executed full structural and interior renovations, storefront refreshes, life-safety and elevator systems upgrades, and the build-out of new market-rate apartments where vacant upper floors allowed. As spaces came online, our in-house property management team — Reli Property Management — led the leasing effort, ultimately placing 15 new commercial tenants across the corridor. Each new tenant added a different reason for someone to be on Main Street, compounding foot traffic and strengthening the leasing comps for the next building we brought to market.
Once the portfolio was stabilized, Rice Pegher refinanced a tranche of the assets with a local credit union, locking in 3.75% fixed-rate debt for 10 years on a 25-year amortization schedule. The refinance retired all outstanding loans and returned 60% of Rice Pegher’s invested cash.
The end result is a fully stabilized portfolio delivering an average 31% cash-on-cash return YOY, with significant equity remaining in the assets and a low, fixed cost of capital locked in for a decade. Just as importantly, the redevelopment created 15 new places of employment on Main Street and added market-rate residential density in the central business district — building real, durable economic activity in the community where we live and work.
The Zelienople Portfolio is the basis from which we continue to pursue additional Main Street redevelopment opportunities in the Zelienople business district — same thesis, same operating model, growing footprint.
