Heritage Buys Cross Keys Commons for $34M

The seller was the New York-based American Continental Properties Inc., which was represented in the transaction by Jones Lang LaSalle, also New York. American Continental retains several retail properties in the Garden State, all in the South Jersey towns of Berlin, Millville, Ewing Twp., Pennsville, Cumberland and Burlington. Cross Keys Commons was considered the "star" of ACP's South Jersey portfolio.

"This was a great chance for a growing REIT to purchase the area's dominant shopping center as measured by location and tenant profile," according to Jones Lang LaSalle senior vice president Mark DeRiemer, who arranged the sale. "There were numerous bidders on this deal, representing institutional and entrepreneurial capital. I think they all recognized the value of a high-grossing Wal-Mart anchor, a locally dominant grocer and a good mix of services and category-killer and specialty tenants."

Cross Keys Commons was built in 1989, and subsequently expanded in 1991 and 1995. During those expansions, it took on more of a power center look in terms of its tenant mix. Currently 88% leased, it is anchored by Wal-Mart and Acme, and it has an in-line tenant roster that includes Radio Shack, GNC, Citicorp, KB Toys, Payless Shoe Source and Fashion Bug. Outparcels on the site are occupied by Staples, McDonald's and Fuddruckers.

"It is a highly visible property at a key location," according to DeRiemer, noting that it's at the intersection of Black Horse Pike and Route 555 in one of South Jersey's fastest growing trade areas. "That location makes it a cornerstone for that trade area."

Through its various operating subsidiaries, new owner Heritage Property Investment Trust owns, manages, acquires and develops shopping center properties in 26 states on the East Coast and in the Midwest. Its 25 million sf of retail space has a current market value in the neighborhood of $1.9 billion.