By Jon Peterson
Walnut Creek-based Browman Development Co. has acquired Cupertino’s 77,000 square-foot McClellan Square shopping center and will replace mainline grocer Lucky Supermarkets with Asian grocer 99 Ranch Market.
Greg Gray, a senior originator with Burlingame’s Barry Slatt Mortgage, said the cash-and-debt purchase involved a $13 million mortgage to acquire the property and complete tenant improvements in association with leasing. “It was written at a loan-to-cost in the range of 65 percent to 75 percent,” Gray said. The company completed the deal for Thrivent Financial for Lutherans, a Minneapolis-based life insurance company.
Browman would not comment on the purchase of the property, which sits at South De Anza Boulevard and McClellan Road and also has a Far East National Bank. The seller was a private individual.
The new owners bought Lucky out of its lease, which had another three years to go, Gray said. The 29,000-square-foot Lucky space is to be replaced by 99 Ranch.
Lucky was paying rent in the range of $3 a square foot a year. 99 Ranch will be paying around $19 a square foot a year.
99 Ranch targets food shoppers seeking authentic, quality Asian-food products, making Cupertino an obvious location from a demographic perspective. According to the 2010 U.S. Census, the Asian population in Cupertino grew from 44 percent of the total in 2000 to 63 percent in 2010.
At least one other 99 Ranch-anchored property in Cupertino has attracted institutional interest: the 115,000-square-foot Cupertino Village at Homestead and Wolfe roads. South Bay developer Peter Pau sold the center to New Hyde Park, N.Y., -based Kimco Realty Corp. in 2006 for $65 million. Kimco still owns the property.
99 Ranch, a Southern California company from its genesis, opened its first Northern California store in San Jose in 1991, followed four years later by a store in Fremont. Since then it has expanded rapidly in Northern California in two spates of new store openings in the middle 1990s and nearly every year since 2004, according to its Web site.
The other big move at McClellan Square is that CVS will reduce its size from 25,500 square feet to closer to 15,000 square feet, Gray said. The excess is to be leased to smaller shops. Many drug stores are embracing smaller footprints, he said.
Slatt is the Northern California mortgage correspondent for the Lutherans and currently acts as a servicer on a portfolio in the region valued at $2.5 billion. The company is working on a second transaction with Browman Development involving the Point West Plaza Shopping Center in Sacramento.
Photo courtesy of graycommercial.com