Katz Preps for $150M Retail Spree in Greater DC

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MANASSAS, VA-New York City-based Katz Properties has acquired its first retail holding in the Commonwealth of Virginia, and reports that more deals will be coming shortly there as well as in the greater DC area.

Katz acquired the locally based Westgate Shopping Center for $33.8 million, from a joint venture between Spectrum Partners LLC and Baltimore-based Alex. Brown Realty. The property last traded in 2009, when the JV bought the asset for $25 million from Principal Real Estate Investors. In its latest sale, it traded at a cap rate just at 8%, principal Daniel Katz tells GlobeSt.com. Katz Properties, which has had only a minimal presence in the greater DC area, is gearing up for an investment spree of $150 million to $200 million over the next three years, Katz explains.

“We’ve been interested in Northern Virginia in particular for its growth, job stability and strong demographics. It’s a good market for retail.”

Westgate is Katz’s southernmost holding. Katz liked the 17-acre Westgate in particular because of its Giant Supermarket anchor, since the grocer is the dominant supermarket in the region. “We wanted to make a purchase with them as the anchor,” Katz says.

The 172,000-square-foot center is situated on at 8139 Sudley Rd. Developed in 1964, it is 97% occupied by 20 tenants including Barnes & Noble, CVS, Total Wine and Panera Bread. There are three outparcels.

Webster Bank of Connecticut provided the mortgage financing, which was arranged by Tim Breda of Goedecke & Co. The CBRE team of R. William Kent and Gary S. Lawrence represented both Katz Properties and the seller in the transaction. Winslow Property Management, an affiliate of Katz, will provide leasing and property management services.