Nuveen Real Estate has acquired a portfolio of 13 retail properties across the US states of California, Colorado and Washington for 445.5 million dollars. The acquisition is regarded as one of the largest transactions in the grocery-anchored shopping centre segment in the western United States in recent years.
High occupancy rate and established tenant names
The portfolio comprises a total of around 1.89 million square feet of open-air retail park space. At the time of sale, the properties were 93.5 per cent let. The agreed purchase price corresponds to a valuation of approximately 236 dollars per square foot. Nuveen was advised on the acquisition by the consultancy firm JLL.
Six of the assets are located in California: Santa Susana Plaza in Simi Valley, Marin Gateway in Sausalito, Marketplace at Birdcage in Citrus Heights, Santa Rita Plaza in Salinas, TJ Maxx Plaza in Roseville, and Tracy Pavilion in Tracy. A further four shopping centres are situated in Colorado in the cities of Littleton, Aurora and Englewood. The three properties in the state of Washington are spread across Port Orchard, Lake Stevens and Des Moines.
- —Grocery anchors: Safeway, Walmart Neighborhood Market, Sprouts, FoodMaxx and Grocery Outlet
- —National chain retailers: Target, TJ Maxx, Marshalls, Ross and Best Buy
- —Financing partner: U.S. Bank for 11 of the 13 properties
Sound financing structure and strong fundamentals
For eleven of the thirteen properties, U.S. Bank provided debt financing amounting to 239 million dollars. The loan covers 54 per cent of the total purchase price. JLL did not disclose details regarding interest rates or maturities.
Daniel Tyner, Managing Director at JLL, explained that investor interest in prime retail space in good locations remains consistently high. The acquisition provides Nuveen with significant scale as well as geographic diversification across several key markets on the West Coast. The combination of established convenience retail centres in densely populated areas and future value-add potential sets the portfolio apart.
In addition, demand for grocery-anchored retail parks is supported by limited new development activity across the three states and continuous population growth. For this reason, institutional investors are increasingly turning to open-air retail properties characterised by dependable tenant profiles and a constrained supply of space.
