Property Spotlight: Time Square
From Vision to Results: How Time Square Outperformed Expectations
When Time Square Shopping Center in Apple Valley, Minnesota, was acquired in September 2022, the business plan was straightforward: acquire a well-located shopping center, invest strategically in renovations, improve tenancy, and create value through active asset management. Today, less than four years later, the results speak for themselves.
Investment Overview
Purchase Price: $10.75 million
Capital Improvement Plan: $3.15 million renovation
Acquisition Date: September 30, 2022
Property Size: 98,500 square feet
Location: Apple Valley, Minnesota
The strategy centered around modernizing the property, improving tenant mix, increasing occupancy, and driving cash flow growth through professional leasing and asset management.
Creating Value Through Execution
The transformation began immediately after the acquisition. The ownership team comprises of Endurus Capital, Obsidian Group, and PrimeSite. We partnered with ONYX Strategic Partners for construction management and MidAmerican for property management to reposition the center through extensive exterior renovations, upgraded signage, improved lighting, parking lot improvements, ADA enhancements, façade modernization, and strategic tenant improvements.
At the same time, Obsidian’s internal leasing team aggressively pursued high-quality tenants and rent growth opportunities. Over the course of the project, the property attracted and signed tenants, including:
X-Golf
Wingstop
Bricks & Minifigs
Spice Village
Kismayo Halal
Serious Sanji
Multiple lease renewals at rents significantly above previous rates, with some leases signed for over $10/sqft above pro forma.
The result is a property that ultimately achieved 100% leased occupancy, a significant milestone that positioned the asset for long-term success.
Financial Performance Exceeds Underwriting
As leasing momentum accelerated and renovations were completed, Time Square consistently outperformed its original business plan.
By 2024:
Revenue was running substantially ahead of projections.
NOI consistently exceeded underwriting.
Quarterly preferred return distributions were fully supported by property operations.
The center's performance continued to strengthen through 2025 and 2026:
Occupancy reached 100%.
Revenue exceeded budget by as much as 56.7%.
NOI exceeded projections by as much as 91.4%.
Debt service coverage remained exceptionally strong after the refinance, hitting 1.6 to 1.9 monthly.
Latest Monthly Snapshot (May 2026)
Occupancy: 100%, versus a 95% pro forma assumption
Total Revenue: $228,071 against a $157,507 pro forma, a positive variance of 44.8%
NOI: $146,023 against a $97,688 pro forma, a positive variance of 49.5%
DSCR: 1.61x, comfortably above the lender's 1.25x stability threshold even with the higher debt load from the 2025 cash-out refinance.
Market Tailwinds Support Continued Upside
Time Square's rent growth isn't happening in isolation — it's tracking a Twin Cities retail market that remains tight and increasingly expensive to build in.
Retail vacancy: ~6.1% metro-wide and just 5.4% in the suburbs as of year-end 2025, with quality space scarce
Market rent growth: Twin Cities retail asking rents have climbed to $23.00/SF NNN, up from $17.70/SF the prior year
Constrained new supply: only about 278,000 SF of new retail is projected across the metro in 2026, keeping well-located, fully leased centers like Time Square in a strong competitive position
The Refinance
One of the most significant milestones occurred in June 2025, when ownership completed a refinance that allowed investors to recover a substantial portion of their original capital while maintaining their ownership interest in the property.
The refinance returned approximately 65% of original invested capital back to investors. Importantly, this was a return of capital—not a sale—and investor ownership percentages remained unchanged, with no tax implications.
This refinancing event dramatically improved investor returns while preserving future upside from the property's ongoing cash flow and appreciation potential.
Investor Returns:
The combination of operating distributions and refinance proceeds has generated exceptional results.
For a $100,000 Investment:
Capital returned through refinance and distributions: $98,625
Percentage of original investment returned: 98.6%
Time period: 3.5 years
Additionally, investors are currently receiving annualized cash yields exceeding 18% on their original investment, demonstrating the power of returning capital while maintaining ownership in a highly productive asset.
After our next distribution, investors will have fully recovered their entire initial investment (through cash flow distributions and member capital returned), while still owning their equity position in a fully leased, income-producing shopping center.
Looking Ahead
What began as a $10.75 million acquisition with a $3.15 million renovation plan has evolved into a fully leased retail destination that significantly outperformed original underwriting assumptions. Time Square is a building that, with the current NOI, could sell for well above the original pro forma, creating significant investor returns.
Key accomplishments include:
✅ Completion of a major property renovation program
✅ Leasing the center to 100% occupancy
✅ Significant rent growth across the tenant roster
✅ Consistent NOI performance above projections
✅ Refinance returning 65% of investor capital
✅ Nearly 99% of original investor capital was returned through refinance proceeds and distributions
✅ Ongoing annualized cash returns exceeding 18% annualized on their original investment.
Time Square demonstrates the value of disciplined asset management, strategic renovations, and proactive leasing execution. While the project remains ongoing, investors have already experienced a remarkable combination of capital return, cash flow, and value creation in less than four years.
