Mark Taylor and Dean Zang of the Taylor-Zang retail investment group of the Philadelphia office of Marcus & Millichap represented both the seller and the buyer. Several obstacles complicated the transaction, according to Taylor. The entire center consists of seven different parcels. Two of them, an adjacent 120,000-sf Wal-Mart and an 80,000-sf former Heckinger's, were not a part of this transaction. New York City-based Vornado Realty Trust owns the vacant Heckinger's.
"The center was turned into a condominium so Wal-Mart could own its building," Taylor tells GlobeSt.com. However, Wal-Mart plans to vacate this property and relocate to nearby Broadcast Square in Reading. Berkshire Square's former owner obtained an assignment from Wal-Mart to acquire that building when Wal-Mart's new supercenter is completed. The new owner took that assignment, but no money will trade hands until Wal-Mart vacates, which Taylor estimates will occur within about two years. He declined to disclose the price the new owner will pay Wal-Mart.
In addition to the pending Wal-Mart unit vacancy, just two years remain on the base term of the lease for a 51,335-sf Redner's, the center's grocery anchor. For now, however, the five parcels included in this acquisition are 100% leased, and a 23,144-sf Staples is among the tenants.
As a part of the transaction, the buyer was required to assume debt on the center, which was built between 1991 and 1992. Taylor declined to disclose the amount of the loan, but says, "it was obtained three years ago, at a rate that is higher than it would be now and cannot be prepaid."
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