By Meghan Hall
Westgate Shopping Center in San Leandro has been bought by New York-based Blackstone Real Estate and its affiliate ShopCore Properties for $87 million. The property, located at 1933 Davis St., was purchased in all cash transaction, according to Alameda County property records. The seller was an entity associated with Scanlankemperbard (SKB) of Portland, Oregon, according to public documents. This group had owned the property since February of 2015, when it paid $41,664,500 for the asset. Newmark KnightFrank (NKF) represented SKB and WHI Real Estate Partners in the transaction.
The latest sale closed on October 29, 2018.
The property is a 586,407 square foot grocery-anchored mixed-use asset with 361,132 square feet of retail space and 225,275 square feet of office and prototyping space.
“The property’s size, location, and favorable zoning allow it to cater to a multitude of different users and evolve over time with ever-changing shopping and office working habits,” said NKF’s Managing Director Brandon Rogoff in a press release. “This is a rare combination of attributes for an asset, which was one of the reasons the buyer was attracted to this opportunity.”
The purchase price for the property was much higher than the assessed value of the roughly 800,000 square foot site; public records indicate that the shopping center was valued at around $58.9 million as of June 2018.
The mall, built in the 1950s was originally occupied by Plymouth and has evolved over time from its original use as an automobile manufacturing plant. The building was sold in the 1970s to Caterpillar, a Peoria, Illinois-based heavy machinery manufacturing company, which ulitized the the site until the property was sold again in the 1980s. During the 1980s, the plant was repurposed into a retail center. The second floor of the two-story mall was typically used for warehousing and storage before it was converted into space for tech and artisanal entrepreneurs.
Westgate Shopping Center is located just off of the State Route 112 and Interstate 880 interchange, and it is also about ten minutes’ drive from Oakland International Airport. A Costco Wholesale warehouse store is right across the street and another small shopping center with traditional retailers such as Banana Republic, Men’s Warehouse and a Gap Outlet is also just a few blocks away off of Marina Boulevard.
This second floor — called Gate510 — has become for a variety of commercial kitchen, robotics and brewing and distilling companies such as Dr. Hops, All Ways Sewing and Gua Teak. Gate510 is currently undergoing renovations according to its website and will offer a variety of amenities to its tenants, such as event and performance space, a café area with free coffee and lounge space when completed. Tenants can lease a variety of space, ranging from 1,000 square feet to 10,000 square feet, that will feature industrial interiors with finished with concrete floors, high ceilings, large windows and skylights. According to Mariana Garcia, economic development specialist with the city of San Leandro, the Gate510 portion of the mall is almost entirely leased.
“Westgate Center was a very unique opportunity to acquire 20 plus acres of prime real estate along the 880 Corridor in a market that still has tremendous growth prospects,” said Nicholas Bicardo, NKF’s vice chairman in a statement. “In addition, the stable retail line-up on the ground floor and alternative uses on the second level provide optionality that is highly sought after when acquiring real estate of this scale.”
Major ground floor retailers, such as Walmart, Office Depot, Burlington Coat Factory and Home Depot serve as anchors to the mall and combined with Gate510 upstairs offer a unique set-up for a regional shopping center. Many brick and mortar retail centers are currently undergoing retrofitting in order to create more sustainable mixed-use developments in an effort to make shopping more experience-based. Westgate Shopping Center, with its combination of retail, office and production space, appears to be ahead of the trend.