By Jon Peterson
The owners of a core grocery store-anchored shopping center will be testing the industry’s demand for fully leased retail assets in one of Northern California’s busiest submarkets. Boston-based TA Associates has placed on the market for sale the 140,600 square-foot Arden Watt Marketplace in Sacramento located at several addresses along Arden Way. The seller and its brokerage firm have not provided pricing guidance on the asset sale at this time.
The seller was chosen the San Francisco office of Cushman & Wakefield to be the listing agent on the transaction. The lead person on the sale is Dan Wald, an executive managing director of the firm. Also involved in the transaction is Don LeBuhn, executive managing director.
TA Associates has been the owner of the property for more than four years. The real estate investment firm acquired the property for $25 million in May 2018, according to public records. TA had purchased the property for one of its value-add commingled funds and is now looking to sell the asset following the improvements it has made to the property and presumably achieving its business goals as an investor.
Some of the main tenants in the property include Safeway, which takes up nearly 40 percent of the property with a lease that expires in 2028, CVS Pharmacy, which is in for roughly 18 percent of the space has a lease that runs through August of 2024, Dollar Tree and McDonald’s. The seller has brought in two new tenants to the property since it has owned the shopping center. One of these tenants was California Family Fitness, which occupies roughly 30 percent of the total space in the property, or 41,287 square feet. The company invested $4 million of its own capital to make this location a strong one for the company. Some of the features of its space include a regulation basketball court, men’s and women’s locker rooms equipped with steam saunas and spas including a 7,000-square-foot swimming pool and a 1,200-square-foot cross-fit training area. This tenant has a lease that runs until the end of August 2033.
TA also added to the shopping center a new Chipotle Mexican restaurant. This tenant is expecting to open its new drive-through concept for business in either the fourth quarter of this year or the first quarter of 2023. This operation would allow customers to be able to have less contact with other customers and not have to get out of their cars to get their order. The lease with this tenant does not expire until the end of 2037.
The shopping center is expected to attract both institutional investors and private capital sources to the property given its size and investment profile. Since the property is fully leased and generates roughly $1.8 million in net operating income, according to its offering document, it could see interest from investors from across the country.
The property was originally developed in 1999 and was recently renovated in 2022. The lot, which has several addresses, 3302, 3308, 3320, 3338, 3350, 3400, and 3412 Arden Way, sits on a nearly 14-acre parcel. The intersection of Arden and Watt is one of Sacramento’s strongest retail intersections and boasts impressive traffic counts, according to the offering document.