Asian-Focused Festival Plaza Trades, Highlighting Ethnic Specialization in NJ Retail
Retail centers with a grocery anchor where there are large Asian populations could be successfully redeveloped to attract tenants catering to Asian populations, CBRE's Jeffrey Dunne says.
EDISON, NJ—Retail developers seeking to revive sagging grocery-anchored centers in New Jersey should be looking closely at ethnic demographics for opportunities, says Jeffrey Dunne, vice chairman of CBRE’s National Retail Partners. Asian communities are especially attractive for centers that offer a unique mix of retailers and grocery anchors like H Mart, which specializes in Asian foods and products.
Dunne, along with David Gavin and Travis Langer of CBRE’s National Retail Partners just brokered the sale of Festival Plaza in Edison, New Jersey for $53 million, or $351 per square foot, on behalf of Edison I, a joint venture of McCarthy Properties and Lubert-Adler, according to Real Capital Analytics, a proprietary research database service.
The team was also responsible for procuring the buyer, a local private investor. McCarthy acquired the property in June 2008 for $28.4 million, and refinanced it in January 2013 for an estimated $36 million, according to Real Capital Analytics.
Recently redeveloped, Festival Plaza is a 151,763 square-foot, high-volume grocery-anchored center on Route 27 (25,600± cars per day) in Edison, NJ. The center is fully leased, and benefits from the strong nearby demographics, highlighted by average household incomes of $93,835 within three miles and a population of 131,555. The population within five miles of the center increases to over 292,000.
“It’s a great collection of tenants that satisfies the needs of the Asian market,” Dunne says. “If you look at the rent roll, you’ve got H Mart leading the charge, you have Asian banks, Asian restaurants, an Asian spa, so it clearly caters to that.”
Areas like Englewood Cliffs in Bergen County, Edison in Middlesex County, and others with large Asian populations would support successful redevelopment of retail centers catering to Asian populations, Dunne says.
“It’s hard to find a parking space on a Saturday morning,” he says of Festival Plaza. “You have a center that’s satisfying a segment of the market that your typical grocers don’t. If you’re Asian and trying to find the products you want you have to go to a lot of different places. Now it’s more convenient with H Mart and the other tenants that make up the mix.”
With the shuttering of more-traditional grocery chains like Waldbaum’s and A&P, Dunne says, “I think there is space in the category for more specialization, and that’s where you have the Trader Joe’s and Whole Foods, that didn’t exist 20 years ago, in a big way. You’ve got to look for specialization. H Mart is a good example of that. I would say look beyond the typical Shop-Rites and Stop-and-Shops and Acmes, which are the other alternatives.”