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Developer aims to revive Sunrise shopping center, once a retail star in Northeast El Paso

Vic Kolenc
El Paso Times

The 64-year-old Sunrise Village shopping center, once a retail star in Northeast El Paso, has been bought by a Houston area-based real estate developer, who has begun making improvements to the run-down property.

Jerome Karam, a Houston-area lawyer and operator of JMK5 Holdings, which specializes in redeveloping commercial properties, purchased the 15-acre, 186,880 square-foot shopping center, also known as the Sunrise Center, in early September.

Karam is familiar with El Paso because his wife, Leslie Chagra, is an El Paso native and they come here to visit her family, he said.

The center is at 8500 Dyer St., kitty-corner from the iconic New Clock Restaurant.

No sales price was disclosed, but it was close to the $5.5 million list price, said David Luther, executive vice president of investment sales for NewQuest Properties, a Houston commercial real estate firm that handled the sale. The center is appraised for tax purposes at $3.74 million by the El Paso Central Appraisal District.

Jerome Karam, operator of JMK5 Holdings, a Houston area-based commercial real estate development company, stands outside a newly painted facade at the Sunrise Village shopping center, which his company recently purchased, in Northeast El Paso.

JMK5’s all-cash offer beat six other offers, Luther said.

A group tied to T-Group Properties, an El Paso commercial real estate management company, had owned the center. No one from T-Group was immediately available to comment on the sale.

Developer aims to revive shopping center

Sunrise, with dozens of storefronts, had become run down in recent years and was about 60% vacant when the sale was completed.

“We want to return this back to its original glory,” Karam said Tuesday at the shopping center. “It was a great shopping center back in the day.”

The center, completed in 1957, according to NewQuest, was a major and booming retail center for many years.

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Sunrise's first buildings opened in 1955, and by 1962 it had 39 stores with sales of more than $6 million, a 1962 El Paso Times story reported.

The 1960 opening of the larger Northgate shopping center, also known as NorthPark Mall, further down Dyer Street, and the later openings of two big malls in East El Paso,  diminished Sunrise's retail shine over the years. Northgate closed years ago and the city redeveloped the property.

An aerial view of the 15-acre Sunrise Village shopping center at 8500  Dyer St., in Northeast El Paso. It recently was purchased by a Houston-area development company that plans to refurbish it.

Refurbishing run-down properties is JMK5 specialty

Karam said his company specializes in buying “undervalued and underserved buildings” and refurbishing them, often into other uses.

His company's projects include converting a brewery into a hotel and events center and redeveloping a mall into a family entertainment center, now called Mainland City Center, in the Galveston, Texas area, according to the JMK5 website. The company has numerous other commercial, retail, and residential projects – many of them in the Galveston area.

This is Karam's first investment in El Paso. However, he also has a contract pending to buy the nine-floor International Building at 119 N. Stanton in Downtown El Paso, he said. An Austin lawyer bought the building in 2019 and had planned to turn it into a hotel.

Change begins with new coat of paint

Sunrise's façade is currently being repainted from its worn brown exterior to a bright white. More landscaping will be added, Karam said.

A 31,000 square-foot World Gym is to go into a vacant space where a Fallas Paredes department store had operated, Karam said. A laundromat has been secured for the center, and restaurants also will be brought in, he said.

A World Gym is to go into the Sunrise Village Center space once occupied by a now-closed Fallas Paredes department store, developer Jerome Karam reported.

Major current tenants include a Dollar General, a Sally Beauty Supply store and a Black Fridays discount store.

The goal is to get to about 85% occupancy in the next six to eight months, Karam said.

Three buildings along Tetons Drive and two along Dyer Street at the front of the center are to be demolished and marketed as retail pad sites, Karam said. The buildings include two beer stores and a small, local restaurant.

A deal hard to pass up 

Karam bought the center because it's a deal not easily found in other large Texas cities, he said. His wife’s family ties in El Paso are an added bonus, he said.

“It’s very difficult to get this price” for this type of property in other cities, Karam said. “We can make some dramatic differences immediately and be below market (leasing) rates.”

"We felt Dyer is an up-and-coming area, and we felt we could bring a lot of value to it," he said.

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The 64-year-old Sunrise Village shopping center, once a retail star in Northeast El Paso, was recently sold to a Houston-area developer who has begun to make improvements in the run-down property.

Luther, at NewQuest Properties, said the Sunrise deal attracted seven offers in two days from El Paso and out-of-town investors because increasing construction costs make redeveloping an existing shopping center attractive.

The center sold for about $30 a square foot, “and you can’t build a new center for that price,” he said.

The center’s proximity to the Fort Bliss Army post and a “strong population density” in the surrounding neighborhoods also made it an attractive deal, he said. Investors also see El Paso as a growing market, Luther added.

Vic Kolenc may be reached at 546-6421; vkolenc@elpasotimes.com@vickolenc on Twitter.