Linear Retail Properties has paid $10.9 million for The Marketplace, a 33,000-square-foot strip center in Burlington located adjacent to the New England Executive Park office complex and the Burlington Mall. The sale is the latest in a string of recent success stories for the local retail market.
The holiday shopping crunch may still be a few weeks away, but retail properties have been in season throughout 2004, with a continuing flow of transactions keeping local investment sales brokers bustling. In the latest round, Linear Retail Properties has acquired another Massachusetts asset with its purchase of a Burlington shopping center, while a Miami real estate investment trust has completed its protracted acquisition of six grocery-anchored centers in Greater Boston, a portfolio that fetched $120 million.
“It has been an unbelievable year,” acknowledged Cushman & Wakefield of Massachusetts broker Geoff Millerd, who specializes in marketing retail properties. Headlined by the blockbuster $109 million sale of 350 Washington St. in downtown Boston this summer, C&W of Massachusetts has sold $350 million of retail properties through the first three quarters, with another $100 million expected to close by the end of 2004.
CBRE/Whittier Partners negotiated the sale of the six shopping centers to Equity One Inc., which is using the holdings as a springboard into the region. Calls to Equity One officials were not returned by press deadline, but the company issued a release last week touting its foray into the area.
In the release, Equity One Chief Executive Officer Chaim Katzman stated that the firm sees the deal as “an important first step toward our goal of acquiring similar, high-quality properties and portfolios anchored by leading supermarkets or other necessity oriented retailers in the best urban markets on the East Coast.”
“This portfolio,” Katzman continued, “is an effective way to enter the demographically strong and densely populated New England market.” All six properties are 100 percent leased. They are located in Cambridge, Medford, Plymouth, Quincy, Swampscott and West Roxbury, and are anchored by such supermarkets as Shaw’s, Star Market and Whole Foods, a smaller, organic-oriented concept store slated to open in January.
CBRE/Whittier principal Chris Angelone, who brokered the Equity One sale with colleague William Moylan, said the portfolio received extensive interest from a range of capital sources. “An opportunity to acquire six grocery-anchored shopping centers so close to Boston obviously doesn’t come along every day,” said Angelone, who called the outcome with Equity One “a great deal for everybody.” The agreement was initially reported by Banker & Tradesman in August just as Equity One was conducting its due diligence process.
Previously owned by Crosspoint Assoc. and Charlesbank Capital Partners, the half-dozen shopping centers total nearly 400,000 square feet. Along with that portfolio, CBRE/Whittier has negotiated close to $300 million of shopping center sales in Connecticut and Massachusetts nine months into 2004, with several other transactions still in the works.
‘The Dominant Player’
Spaulding & Slye Colliers also has been busy on the retail front. Principal James M. Koury reported last week that the firm has closed on or has under agreement $211 million of shopping centers, including an $80 million sale pending in central Massachusetts. Koury declined to discuss specifics of that or other properties in his firm’s pipeline, but the veteran retail broker agreed that the ardor for such assets continues to be strong.
“We’re having a record year,” said Koury, adding that real estate investment trusts such as Equity One are leading the charge. Indeed, Koury estimates that REITs will invest about 70 percent of the capital for northeast retail sales this year. While that figure is similar to 2003, it is up substantially from the 17 percent level REITs reached in 2002, according to Koury. “They’ve went from being a minor entity to where they are now the dominant player,” he said.
In the Burlington deal, Linear Retail Properties paid $10.9 million for The Marketplace, a 33,000-square-foot strip center located adjacent to the New England Executive Park office complex and the Burlington Mall. Linear bought the asset from PAC/SIC LLC, an Oregon-based real estate operating and development company which had held the property for several years.
William J. Beckeman, president and chief executive officer of Linear, was unavailable for comment last week about the purchase, but in a release, he called The Marketplace “one of the truly premier convenience-oriented centers in Greater Boston.”
The complex, Beckeman said, “is ideally situated to serve the high local concentration of businesses, nearby neighborhoods and steady retail traffic generated by the Burlington Mall and surrounding retail destinations.” Along with a Starbucks, tenants of the shopping center include AT&T Wireless, FedEx, D’Angelos and Joseph A. Bank clothiers.
The Burlington purchase is just the latest locally for Linear, which has acquired similar convenience-oriented retail in Fall River and most recently in Danvers. Targeting investments running from $500,000 to $15 million, Linear is pursuing both stabilized centers and those requiring a repositioning strategy. The Burlington-based firm is chasing such assets in partnership with Principal Enterprise Capital, a subsidiary of the Principal Financial Group of Iowa.
