Vestar Enters Bay Area with $55MM Deal in Petaluma

Vestar, San Francisco Bay Area, East Washington Place, Regency Centers, UBS Realty Investors, Sprouts, Dicks Sporting Goods, TJ Maxx, HomeGoods

By Jon Peterson

Phoenix-based Vestar has closed on its first shopping center acquisition in the San Francisco Bay Area with a $55 million purchase of the 203,000 square foot East Washington Place shopping center in Petaluma, according to sources familiar with the property. The property is located at 401 Kenilworth Drive.

The seller was Regency Centers based in Jacksonville, Fla., and the company was also the original developed of the property. The public REIT declined to comment on the buyer and the sales price.

Vestar has acquired the property along with its financial partner, UBS Realty Investors based in Hartford, Conn., as stated by industry sources. UBS, the Swiss financial services concern, does have a regional office in San Francisco at 455 Market Street. The cap rate on this sale was 8 percent, assuming the property’s current net operating income.

“We see this property as a newer center, with a strong tenant mix and good demographics. It’s a very stable property with some upside, since there is a pad site where the center could be enlarged in the future. We have no immediate plans for this part of the property,” says Clint Marchuk, a vice president of acquisitions for Vestar.

The center is nearly full, with occupancy around 99 percent. The tenants in the part of the property that was acquired include, Sprouts, Dicks Sporting Goods, TJ Maxx and HomeGoods. In the center there is also a Target store, but this space was not included in the sale of the property, since Target owns its own space.

Vestar would like to be more active in the San Francisco market going forward and is planning to expand its portfolio in the region. “We are looking at some additional investment opportunities in the region now and hope to buy more assets in the San Francisco Bay Area in the future. Most of the retail assets that we look for are anchored retail assets,” said Marchuk.

The company is very familiar with marketplace around the region. Vestar manages and leases three million square feet of retail assets in the San Francisco region for a number of property owners.