Retail Opportunity Investments Beefs up Bay Area Portfolio with $140.5MM in Retail Deals

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By Jon Peterson

San Diego-based Retail Opportunity Investments Corporation (ROIC) has had a recent surge of investments in shopping center investments in the San Francisco Bay Area totaling $140.5 million, according to the company’s 2015 second quarter earnings report.

The transactions were split into two kinds of deals. Three of them were deals where it planned to buy entire shopping centers. One of these was the $32.5 million acquisition of the Jackson Square property in Hayward. The buyer also has two assets under contract. One was the $42.4 million planned purchase of the Iron Horse Plaza asset in Danville. The other was the $42.5 million acquisition of Gateway Centre in San Ramon.

ROIC also has acquired key anchor spaces at two of its existing shopping centers for $23.1 million. One of these was a 58,500 square foot space at its Pinole Vista Shopping Center in Pinole. The other was a 35,000 square foot leasehold interest at its Canyon Park Shopping Center in Bothell, Wash.

ROIC did not respond to several phone calls and e-mails seeking comment for this story. The seller of Jackson Square in Hayward was Carlsbad, Calif.-based Terramar Retail Centers. The listing agent on the sale was DTZ.

“The seller of this property had owned the asset for 15 years. Terramar is now spending most of its time working on larger projects as a result of its acquisition at the beginning of the year of the Property Development Centers entity from Safeway,” says Dan Wald, an executive managing director of DTZ Retail. He works out of the company’s office in San Francisco.

There was a tremendous interest in the property from potential buyers. “We had a total of 140 registered parties and we received a total of 17 offers. Many of the buyers were REITs. I think that this shows that there is capital spill over from San Francisco to many other parts of the Bay Area,” said Wald.

The cap rate on the property in Hayward was a sub six percent, which is based on the property’s current net operating income. The shopping center has no vacancies. The anchor tenants in the property are Safeway, CVS and 24 Hour Fitness.

Gateway Centre is a 110,000 square foot property that is anchored by a Savemart Supermarket and Walgreens. The asset is currently 94 percent occupied. Iron Horse Plaza totals 62,000 square feet and is anchored by Lunardi’s Markets, a San Francisco-based grocer. There are no vacancies in the property at this time.

ROIC now owns a retail portfolio that totals 1.5 million square feet in Northern California, according to its Website. The overall occupancy of these assets is 94 percent. The real estate investment trust focuses on buying properties on the West Coast. Its three other targeted markets are Southern California, Seattle and Portland.

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