WASHINGTON, DC—Rutherford Crossing, an 80,000-square foot neighborhood retail center in Winchester, VA, has traded for $16.8 million, or approximately $210 per square foot. The buyer and seller are both local companies -- respectively, JCR Cos, and NVRetail.

The broker? That, as they say, is complicated.

Dean Zang, senior vice president investments in Marcus & Millichap's Washington DC office, Mark Taylor, senior vice president investments in Philadelphia,  Alvin Mansour, executive vice president, Investments, and Phil Sambazis, first vice president, Investments, both of the firm's San Diego office, represented the seller and procured the buyer.

It was quite the effort, especially considering the relatively moderate footprint Rutherford Crossing has in the retail world.

But not in Zang's eyes, who is hoping to use this deal as well as a growing number of others to pry open the DC area retail brokerage market and carve out a piece for himself and his group, also known as TZD Group.

The group is perhaps better known for its track record with net lease sales. As it tries to make inroads in the DC neighborhood retail market -- either anchored or not, Zang is not picky -- it is hoping to develop a similar rep.

It won't be easy.  CBRE has a solid grip on the market and there are plenty of contenders nipping at its heels, such as Eastdil and JLL. Plus the DC area has a healthy selection of specialty shops that focus exclusively on retail.

But Zang sees an opportunity with a very specific asset class -- a product type that is typified by the Rutherford Crossing. This would be the class B and class C strip centers that are possibly grocery-anchored or maybe shadow anchored. They tend to be around 90,000 or so square feet. These sales are more challenging, the bidders are fewer and the buyer pool is less well defined. Sometimes they have a good story to tell; sometimes -- the buyer and broker promise! -- that story will unfold as a community builds up. That is when a sale in this category can get really challenging.

How They Sold Rutherford Crossing

Consider Rutherford Crossing. Developed by NVRetail in 2008, it was listed unsuccessfully before by another brokerage house. It was originally developed to service the 2,400 homes planned for the Snowden Bridge community across from Martinsburg Pike, according to Peter Lunt, principal with NVRetail. "New homes can be seen under construction again and as the residential market recovers, Rutherford Crossing will be well positioned to benefit from the area's growth especially in proximity to the FEMA Operational Headquarters," Lunt says in a prepared statement.

Today it is 98% leased by 17 tenants, including PetSmart, Sleepy's Mattress Professionals and Party City, and shadow anchored by Target and Lowe's, which were not part of the sale.

Phase 2, which will add a grocery store and several pad sites, will begin soon.

$120 Million in Deals

Rutherford Crossing will now joins the $120 million in investment sales the group has made in the DC area in this specific asset class over the last 18 months.

It's a nice track record, especially for a new product category, but is it enough to lever open DC's market?

Zang says yes and not just because of his very targeted strategy. DC's retail brokerage market is undergoing a shift, with the legacy, established brokers losing their grip, at least a tiny bit, on the market as other brokers get very aggresive as they try to edge in.

One example would be HFF's local retail investment sales group, which formed in Spring of 2013 and has been active in the region since.

The group, which consists of John Owendoff and Jordan Lex, has closed nearly $400 million in retail deals in 2015, a spokersperson tells GlobeSt.com. They have bene pursuing  the institutional sized deals in the region that have come to market -- winning more than a few. 

But there have also been whispers of the group making bids for smaller centers, suggesting they are willing to go downstream a bit in size and price to gain marketshare.  The HFF spokesperson, though, prefers to emphasize the larger-sized transactions the group has landed, and indeed, inside baseball talk in the community reports that HFF and Eastdil have competed for several larege deals.

"Recent high profile assignments include the sale of a 250,000-square foot power center anchored by Trader Joe's and Michael's, the sale of a trophy-quality Harris Teeter shopping center in Northern Virginia, and the capitalization of a 450,000 square foot Wegmans development," the spokesperson says.

JLL is another broker looking to pick up market share here. It recently hired CBRE broker Bill Moylan to lead the Mid-Atlantic retail business for JLL.

Moylan had a formidable track record at CBRE, with his team directly involved in close to $14 billion in transactions.

Then there are smaller, specialty retail houses here.

KLNB Retail is one example. It just brokered the sale of Ballenger Creek Plaza, a 75,527-square foot shopping center in Frederick, MD for $9.5 million, representing the seller, Cohen Equities, in this transaction. It is the type of asset that Zang and his team would target. Unfortuantely for Zang, he probably had little chance of winning it. 

Cohen Equities bought Ballenger Creek in 2013 when it was 29% occupied. KLNB's property management division added about 54,000 square feet of occupancy to the center over the years.

Having a local presence and track record counts a lot.

But it doesn't count for everything, Zang points out. Hard work, a lot of handholding and some help from colleagues across the country also do their bit to eek out $120 million in deals. Plus two more in the near future. Oh yes, Zang adds. "We have two deal under contract in the Baltimore area. We expect to close on those shortly."