Vestar, said to be one of the largest privately held owners of shopping centers in Western states, made its first play in the North Bay with the purchase a large Petaluma regional center for $55 million.
An entity affiliated with the Phoenix- and Los Angeles-based firm, Vestar Petaluma EWP LLC, bought the 343,000-square-foot East Washington Place center on Aug. 2, from Regency Petaluma LLC, affiliated with Jacksonville, Florida-based Regency Centers, according to public records.
Regency opened the center in 2013, after years of procedural and legal delays to the $60 million project stalled the start of construction to 2012.
Investing in the shopping center is also a statement about Petaluma, said Jeff Axtell, Vestar executive vice president and regional manager.
“We have a unique track record of redefining retail spaces and the role they play in the communities that surround them, and we’re truly invested in the success of our neighborhood and the city as a whole,” Axtell said in a statement.
Vestar touts its reputation for revitalizing shopping centers with “innovative leasing and marketing initiatives.” The purchase of the Petaluma property is part of a strategy to expand in the Bay Area and “refine” the retail market in Northern California.
Founded in 1989, Vestar (www.vestar.com) now controls over 30 million square feet in California, Arizona, Washington, Utah, Colorado, Nevada and Texas. The company’s eight other Northern California centers include six in the Bay Area, the largest of which is the 1.14 million-square-foot Pacific Commons in Fremont.
“The East Washington Place acquisition is an important asset for us,” said Clint Marchuk, vice president of acquisitions, in a statement. “There’s already a strong tenant lineup and a great community around it, and we’ll be implementing ways to make it even better. We have very strong partners and believe we can elevate the retail story regionally, and beyond.”
Anchor tenants are Target, TJ Maxx/Homegoods, Sprouts, Ulta Beauty, Dick’s Sporting Goods and PetSmart. The shopping center was about 99 percent occupied when it was sold, according to a spokesman for the new owner.
The retail vacancy rate for Petaluma was 4.6 percent of 3.30 million square feet at the mid-year point, according to brokerage Keegan & Coppin Co. Inc./Oncor International.
Regency Centers (www.regencycenters.com) did a green overhaul on East Washington Place, obtaining LEED Silver certification from the U.S. Green Building Council. Regency said the Petaluma property was the first in the company’s portfolio to get LEED certification, backed by work funded in 2014 by $250 million in 10-year “green bonds” Regency said it sold.
Regency Centers’ remaining North Bay holdings are Silverado Plaza in Napa and Davis properties Oakshade Town Center and The Marketplace.
Eastdil Secured represented Regency Centers in the East Washington Place sale, and Vestar handled the deal itself.
Staff Writer Jeff Quackenbush covers wine, construction and real estate. Reach him at email@example.com or 707-521-4256.