page 1 H&R RETAIL INVESTMENT PROPERTIES DIGEST [FOURTH QUARTER 2018] [FOURTH QUARTER 2018] GREATER WASHINGTON, DC – BALTIMORE REGION http://investmentproperties.hrretail.com Aldi-Anchored Enterprise Plaza Traded East Coast Acquisitions LLC has acquired Enterprise Plaza Shopping Center. The Seller was Combined Properties. East Coast paid $30,250,000 for the 190,211 sf center along Annapolis Road a mile from the Beltway. Aldi and T.J. Maxx co-anchor the site, with Aldi recently renewing a five-year option that keeps it selling groceries through 2023. Verizon Wireless, Advance Auto Parts and Dollar Tree likewise populate the Plaza, while a 26,428 sf junior box is available for lease. Landover Mall For Sale Landover Mall now demolished is on the market for sale. Lerner Enterprises decided to put the 80-acre tract up for sale. Closed 10 years now, the Mall site, was one of the finalists for the FBI headquarters. However the GSA decided more than a year ago that the FBI building would not move out of downtown D.C., as originally planned. The crumbling, brutalist Hoover building will be demolished, the new FBI headquarters to be built on the same land. The Mall site is Zoned for mixed-use but it’s a big empty parcel today. County planners have written into the local Sector Plan a vision that makes the Mall the center of a street-grid plan with offices, residential and a Main Street. In its prime Landover Mall was a 1.3M sf 4 department store anchored enclosed regional mall located in Landover, MD, directly across from FedEx Field, off MD 202 and Interstates 495. The mall was built by Sonny Abramson and Ted Lerner of Lerner Enterprises, and opened in 1972. It was a major attraction through its opening years in Prince George’s County. With Hecht’s, Garfinckel’s, Woodward & Lothrop (Woodies) and Sears as the anchors. It was the first mall in the region to have four anchors until Fair Oaks Mall opened in 1980. There was a six-screen theater in the basement, which had its own escalators. In 1990, Garfinckel’s filed for bankruptcy and went out of business. The anchor space was never replaced. Five years later, Woodies went out of business. JCPenney moved into the former Woodies location but found business unprofitable. The store was converted to a JCPenney outlet location in fall 1998 and was closed altogether in early 2001. In early 2002, Hecht’s closed its doors after opening a new store at Bowie Town Center in nearby Bowie, MD. The mall itself entered a state of decline in part due to the fact that the location is a very high crime area. Finally, in 2002, when Hecht’s closed the mall’s doors were closed and ultimately it was demolished in 2006. Sears remained open because it owned the land beneath the store. Sears later sold the land underneath its store to Lerner. In January 2014 Sears announced that it would close. Sears store in Bowie New Town Center The 132,639 sf store at 15700 Emerald Way in Bowie is on the list of coming closures. The Landlord Sears affiliate Seritage SRC Finance owns the 10.8 acre property. (Both Sears and Macy’s own their own properties at the Bowie New Town Center). Up to 800 rental apartments would anchor a mixed- use redevelopment of the Sears store at Bowie New Town Center. Officials from Seritage Growth Properties say they’ll start seeking entitlements for a mix of housing, retail, office and a hotel on the 10.8 acres where the now-empty Sears store sits. Seritage had bought the Route 197 and Evergreen Parkway property among a couple of hundred other Sears and Kmart locations that it has acquired since 2015. A full- blown redevelopment wasn’t the company’s first choice INVESTMENT PROPERTIES DIGEST H&R Retail’s Investment Properties team, led by Michael Gorsage, is pleased to present the Fourth Quarter of 2018 edition of the Digest. The Digest is an edited collection of articles that we gather from various publications. We hope you find the information useful.
Aldi-Anchored Enterprise Plaza TradedEast Coast Acquisitions LLC has acquired Enterprise Plaza Shopping Center. The Seller was Combined Properties. East Coast paid $30,250,000 for the 190,211 sf center along Annapolis Road a mile from the Beltway. Aldi and T.J. Maxx co-anchor the site, with Aldi recently renewing a five-year option that keeps it selling groceries through 2023. Verizon Wireless, Advance Auto Parts and Dollar Tree likewise populate the Plaza, while a 26,428 sf junior box is available for lease.
Landover Mall For SaleLandover Mall now demolished is on the market for sale. Lerner Enterprises decided to put the 80-acre tract up for sale. Closed 10 years now, the Mall site, was one of the finalists for the FBI headquarters. However the GSA decided more than a year ago that the FBI building would not move out of downtown D.C., as originally planned. The crumbling, brutalist Hoover building will be demolished, the new FBI headquarters to be built on the same land. The Mall site is Zoned for mixed-use but it’s a big empty parcel today. County planners have written into the local Sector Plan a vision that makes the Mall the center of a street-grid plan with offices, residential and a Main Street. In its prime Landover Mall was a 1.3M sf 4 department store anchored enclosed regional mall located in Landover, MD, directly across from FedEx Field, off MD 202 and Interstates 495. The mall was built by Sonny Abramson and Ted Lerner of Lerner Enterprises, and opened in 1972. It was a major attraction through its opening years in Prince George’s County. With Hecht’s, Garfinckel’s, Woodward & Lothrop (Woodies) and Sears as the anchors. It was the first mall in the region to
have four anchors until Fair Oaks Mall opened in 1980. There was a six-screen theater in the basement, which had its own escalators. In 1990, Garfinckel’s filed for bankruptcy and went out of business. The anchor space was never replaced. Five years later, Woodies went out of business. JCPenney moved into the former Woodies location but found business unprofitable. The store was converted to a JCPenney outlet location in fall 1998 and was closed altogether in early 2001. In early 2002, Hecht’s closed its doors after opening a new store at Bowie Town Center in nearby Bowie, MD. The mall itself entered a state of decline in part due to the fact that the location is a very high crime area. Finally, in 2002, when Hecht’s closed the mall’s doors were closed and ultimately it was demolished in 2006. Sears remained open because it owned the land beneath the store. Sears later sold the land underneath its store to Lerner. In January 2014 Sears announced that it would close.
Sears store in Bowie New Town CenterThe 132,639 sf store at 15700 Emerald Way in Bowie is on the list of coming closures. The Landlord Sears affiliate Seritage SRC Finance owns the 10.8 acre property. (Both Sears and Macy’s own their own properties at the Bowie New Town Center). Up to 800 rental apartments would anchor a mixed-use redevelopment of the Sears store at Bowie New Town Center. Officials from Seritage Growth Properties say they’ll start seeking entitlements for a mix of housing, retail, office and a hotel on the 10.8 acres where the now-empty Sears store sits. Seritage had bought the Route 197 and Evergreen Parkway property among a couple of hundred other Sears and Kmart locations that it has acquired since 2015. A full-blown redevelopment wasn’t the company’s first choice
INVESTMENTPROPERTIES
DIGEST
H&R Retail’s Investment Properties team, led by Michael Gorsage, is pleased to present the Fourth Quarter of 2018 edition of the Digest. The Digest is an edited collection of articles that we gather from various publications. We hope you find the information useful.
for the building; leasing the two-story structure to another retailer was. But a couple years of looking for a replacement yielded little traction. The former Sears Auto Center has been spun off and redeveloped into a BJ’s Restaurant and Brewhouse, Besides the apartments, which would run to about five stories, Seritage says it envisions about 75,000 sf of retail, a hotel of up to 150 rooms, and about 80,000 sf of office, all of it served by structured parking.
Beltway Plaza Slated for Far-Reaching OverhaulBeltway Plaza would be redeveloped into a lifestyle center with over 2,000 residential units, under a conceptual plan newly filed. Components of the Greenbelt, MD mall would remain, like the Target, the Giant and the theaters, but much would change. Residential would be added in towns, apartments and two-over-two’s, and the core of the current mall would be refined into a more mixed-use, amenity driven space. the full redevelopment plan shows up to 2,250 multi-family, up to 250 townhouses, and as much as 700,000 sf of commercial. Early phase development could include towns and/or two-over-two’s to the rear of the mall, facing Breezewood Drive. So far, Quantum does not have any builders on board for its residential product. If approved, the remodel would begin with phases of townhouses and multi- family, but Plaza owner Quantum Companies, must navigate the entitlement process first. Quantum found general support, among councilmembers. The fact that bricks-and-mortar retailing is suffering in an Internet world isn’t an industry secret anymore, the fear of failure as illustrate by the shuttered and ailing malls throughout the country are a tangible reminder and ample incentive to redevelop the aging 900,000 sf enclose mall.
Giant Food Continues Growth Through Shoppers SwapsGiant Food LLC has been on a real estate spending spree for the past year, opening new locations, renovating old ones and, interestingly, taking over shuttering Shoppers Food Warehouse locations. The spending will continue, as Giant plans to invest $175M on new locations, conversions or store renovations during the next two years. Giant Landover President Gordon Reid says the chain could open another three or four stores in the Mid-Atlantic during the next few years, either via conversions or new locations. There are also
renovations planned for 24 existing stores, though Giant declined to identify the locations. The latest conversion is the Shoppers at 6360 Seven Corners Center in Falls Church. Though that will put the new Giant less than three miles from an existing store at Graham Park Plaza just down Route 50, that shopping center is poised for redevelopment and it’s not clear whether Giant would be involved landlord Federal Realty’s future plans.
Culpeper Colonnade shopping center Sold, getting a MichaelsThe Culpeper shopping center anchored by Martin’s Grocery and Target has a new owner, and is getting at least one new tenant of a crafty nature. The New Jersey-based development company, Heidenberg Properties, announced this week its $32.65M acquisition of Culpeper Colonnade from Regency Centers. The 307,000-sf shopping center is also occupied by Dick’s Sporting Goods, Pet Smart and Staples, which according to a news release from Heidenberg last week will be replaced with a Michaels craft store. There are no details yet on when that will happen, or when the Staples will close. Culpeper Colonnade is 100% occupied, according to its new owner, and sits along the Business Route 29 corridor trafficked by more than 25,000 vehicles per day, according to Heidenberg Properties.
Why Would Someone Pay $6.9Mfor a TD Bank branch in Silver Spring? Because that’s where all the money is, of course. It was Lena Real Estate that bought the 4100 sf foot bank branch at 3132 Briggs Chaney Road. The building was built in 2007, and TD’s lease runs for another eight years. The bank’s immediate neighbors include the Auto Park across the street.
Fortress Spins Off SafewayFortress Investment has been spinning off the Safeway grocery stores it had acquired in a bulk purchase. They sold Olney (59,387 sf ) store they purchased in March for $22.9M to LA-based Cahuenga Capital, LLC, for $25.9M. The Olney Safeway is a new store, built in 2012, and its one where Safeway sells beer and wine. Its latest deal turned the Safeway in Arnold, MD over to Cardinal Capital Partners for $17.1M. Safeway has a long-term lease on the 51,000 sf building.
Finmarc Management Buys the Largo Town CenterFinmarc Management a Bethesda firm paid $44M for the fully-leased, 281,469 sf Largo Town Center located at the intersection of Landover Road and Lake Arbor Way in Prince George’s County, MD. The Seller was Site Centers (formerly DDR) Tenants includes Shoppers Food Warehouse, Marshalls, Regency Furniture, Dollar Tree, Dress Barn and Advance Auto Parts.
ShopOne Enters D.C. Market with Acquisition of Eastgate Shopping Center Lanham, MDShopOne Centers REIT Inc. a NY based owner, operator and manager of grocery-anchored shopping centers, announced its entry into the Washington, D.C. market with the acquisition of Eastgate Shopping Center, a 138,779 sf center located in Lanham, MD. Eastgate Shopping Center is anchored by a 56,526 sf Giant Food. The property also features a diverse mix of leading national, regional and local retailers including McDonald’s, KFC, Huddle House, Drake’s Place Salon World, SoBe Restaurant and Lounge, Ernie’s Crabhouse, PhysioCare, Curves and Eastgate Liquors.
Real Capital MarketsIn December 2018, Real Capital Markets surveyed and conducted interviews with a wide range of industry experts, from entrepreneurial investment firms to institutions. Participants active in all property types, from office to industrial to multifamily and retail, weighed in on the commercial real estate industry as it enters a year of questioning – will the market continue to boom…or will it bust?
HIGHLIGHTS INCLUDE:• Investors remain in buy mode despite increasing
interest rates• The fundamental need for housing continues to drive
the multifamily market• Industrial viewed as the second most attractive asset class• Still plenty of capital available, though trickier to make deals
One year ago, investor sentiment charged ahead with much optimism for 2018. With a strong focus on both value-add deals and the industrial market as a whole, investors continued their search for the best way to achieve a strong yield. As we begin 2019, investors understand that good
opportunities are still available, but often require more work to identify, underwrite and close. Above all, sentiment remains optimistic, though cautionary, that a plateau may be on the horizon.
INVESTMENT OPPORTUNITIES
FOR SALE
BEL AIR TOWN CENTERBEL AIR, MD
SIZE 95,229 SF
TENANTS Long & Foster, Chili’s, Liberatore’s, FedEx Office, Leslie’s Poolmart
FAIRFAX JUNCTIONa 75,632 square-foot grocery-anchored retail center in Fairfax, VA. The center’s tenants include Aldi, Advance Auto, Planet Fitness, CVS, and Pearle Vision.
