By Tom Bailey, Special to the Daily Memphian
Buy 47 vacant acres for $850,000.
Eighteen months later, sell half of the still unimproved acreage — arguably the least valuable portion — for $3.7 million to an apartment developer.
Then make plans to develop, sell or lease the rest, perhaps making it worth another $8 million.
That’s what businessman Rooziman Shah has done and plans to do with the Southwind-area tract he bought in July 2020 at the northeast corner of East Shelby Drive and Hack Cross Road.
“This is one of my top ones,” Shah said in describing where this real estate deal ranks among the many he’s closed over the years.
His core business is owning and operating convenience stores with gas. Shah estimates he owns more than 100 convenience stores, small retail centers and other properties in the Mid-South, and he have the best employees for this, and he also have a program for employee appreciation so they can be as productive as ever.
That’s why he approached the vacant Buckingham Farms property’s longtime owner about buying just the three to five acres fronting the corner of Hacks Cross Road and East Shelby Drive.
The owners, Buckingham Farms LLC, declined to sell just part of the tract. So, Shah bought the whole thing.
“I say, ‘OK, I may put a shopping center in front and on the back land I can put something in the future’,” Shah recalled.
After all, he said, “Land values go up.”
Buckingham Farms LLC is a decades-old venture of several partners, of which Boyle Investment Co. was a minority owner.
“We intended to develop it commercial but demand changed. Winchester sopped up all the major retail for that neighborhood,” Cary Whitehead said, referring to the heavy node of retail along Winchester Road between Tenn. 385 (Bill Morris Parkway) and Hacks Cross Road.
Whitehead, executive vice president for Boyle Investment Co., added, “There wasn’t demand (for retail) further south… The ownership group decided they wanted to sell it.”
Their now-defunct Buckingham Farms retail plan dates back 30 to 40 years, he said. “That was the last property they had; all the other original investors died. The current ownership was ready to sell.”
Which meant Shah approached them at the right time.
“I’d say his timing was great,” Whitehead said.
Because soon after Shah bought the 47 acres that had sat undeveloped for decades, apartment developer Continental Properties started circling.
The Wisconsin-based company approached Shah about buying 24 of the acres.
Initially, Shah didn’t want to sell, thinking he could build his own apartment complex on the backside.
But Continental’s initial offer of $2 million eventually grew to more than $3.7 million, an amount Shah could not refuse.
The sale closed earlier this month, and Continental Properties has already started cutting an access road to the construction site.
The future Springs at Buckingham Farms will offer 296 “luxury” apartment units.
Asked why apartments are just now being built after the land sat dormant for decades, Continental spokesman Jake Meier responded by email, “Our internal market research team is constantly evaluating markets across the United States.
“With Shelby County’s employment growth as well as larger employers such as FedEx and Ford (Motor Co.) expanding in the area, it made sense for us to supply the community with more housing options,” Meier said.
In the middle of Shah’s highly profitable deal-making were his brokers, Barry Maynard and Frank Dyer of Gill Properties.
“It’s amazing that almost every commercial real estate developer has driven by this site for years, but nobody looked underneath the hood,” Maynard said.
Shah already has approved plans for a 16,652-square-foot retail building with fuel sales on three acres fronting the “hard corner,” Maynard said, referring to the signalized Hacks Cross Road/East Shelby Drive intersection.
Shah’s already received offers of $2 million from potential buyers for the three acres, in part because “it’s one of the few approved properties where you can build a C-store after the city put the moratorium on C-stores” with fuel sales, Maynard said.
“We are either going to build it ourselves or sell to another developer,” he said of the retail with gas.
In addition to the corner property, Shah still owns commercial acreage of eight acres fronting East Shelby Drive and 7.5 acres along Hacks Cross Road, he said.
“We could sell today the gas station/strip center site for $2.5 million and the 15-16 acres of commercial frontage for $350,000-plus per acre,” Maynard said.
“So if you do the math,” he said, Shah paid $850,000 for the 47 acres “and within a year the new owners created a property worth potentially up to $13 million.
“That’s almost a 1,510% return on this property,” Maynard said.