MARIN CITY and NAPA -- A Southern California investment group purchased the nearly 182,000-square-foot Marin Gateway Shopping Center in southern Marin County for $36 million, and a Phoenix, Ariz.-based investor purchased the Kohl's department store-anchored Parkway Plaza center in downtown Napa for $19.83 million.
Israel-based retail real estate investment trust Big Shopping Centers (2004) Ltd. announced in a regulatory filing a year ago that a joint venture with Developers Diversified Realty was in contract to purchase Marin Gateway for about $36 million. But in early January the Big-led buyer walked away from the deal, according to Terranomics Retail Services's Dan Wald, who led a team marketing the property.
The property went into escrow in mid-February to Marin Gateway GARP LLC, an affiliate of Solana Beach-based Gerrity Group and sold Aug. 30 for $36 million. Big's disclosure effectively created a price ceiling for the property, according to Mr. Wald.
"The reason the escrow took so long to close was because it involved a loan assumption, and that takes lot longer than it used to," he said. "We strongly encourage our buyers and sellers to engage consultants early on who specialize in the conduit loan business and who know loan and special servicers."
With so many distressed properties demanding lenders' attention, loan assumption applications can go to the bottom of the priority pile, according to Mr. Wald.
The seller was the Bay Area Smart Growth Fund, an affiliate of PCCP, LLC, in partnership with the Marin County Community Development Corporation.
“While PCCP turned Marin Gateway into a successful community-serving shopping center after a period of management distress, Gerrity will take it to the next level," Mr. Wald said. " In fact, Gerrity Group was formed to acquire well-located shopping centers where it can add value and create additional quality by investing in capital improvements, operations and management."
Mark Koenig, in Terranomics' San Rafael office and part of the seller's marketing team with Mr. Wald and Dave Nord, will be handling leasing and advising Gerrity on a merchandising and marketing plan for the center for the next two years.
"The early presumption is to continue make it a value-oriented center with daily goods and services," Mr. Koenig said about the 16-year-old center, originally developed to provide funds for Marin City programs.
The center is about 85 percent occupied, mainly by anchor tenants Best Buy, Ross Dress for Less, CVS and Babies R Us. In the month since the sale, new property manager Shelter Bay Retail Group of Mill Valley has been cleaning up the awnings and vacant spaces. Further capital projects are possible, Mr. Koenig said.
In Napa, an affiliate of Lubert Adler Partners sold the 77,280-square-foot Kohl’s-anchored Parkway Plaza to an affiliate of Cole Real Estate Investments on Aug. 23. Mr. Wald, Mr. Nord and John Schaefer also from Terranomics' San Rafael office marketed the property and received multiple offers. The property contains five other retail spaces.
“Downtown Napa has come a long way over the last years in creating a retail and entertainment destination,” Mr. Wald said.
The acquisition was one of five Cole made in Arizona, Colorado and California totaling $58.2 million. Cole focuses on properties anchored by well-known, good-credit tenants.
The seller of Parkway Plaza brought in Kohl's as the replacement for Mervyn's in 2009. Parkway Plaza is adjacent to Napa Town Center shopping center, and the Kohl's store acts as an anchor for that center.