Townline Square Trades for Nearly $45M

MERIDEN, CT—The grocery-anchored Townline Square Shopping Center has changed hands in an all-cash deal valued at close to $45 million.

Greenwich, CT-based retail REIT Urstadt Biddle Properties reports it has sold the 315,000-square-foot shopping center located at 533 South Broad St. here to a private real estate property group. Brokerage firm HFF, led by Jim Koury, exclusively represented Urstadt Biddle in the sales deal and introduced the buyer.

Urstadt Biddle says it will use the proceeds of the sale to repay revolving debt that was used primarily to acquire grocery anchored shopping centers in fiscal 2014 and the first nine months of fiscal 2015 that all located within the company's core marketplace, which is the metropolitan New York tri-state area outside of the City of New York.

The transaction signals the end of the company's divesture of properties outside of its core market.

The company estimates that it will record, for financial reporting purposes, a gain on the sale of the New Haven County-based property of approximately $21 million in its fiscal quarter ending Oct. 31, 2015. At its current dividend level, the company estimates it will be able to absorb the federal income tax on the gain.

Says Willing L. Biddle, president and CEO of Urstadt Biddle Properties, “The sale of Townline Square concludes the objective we set approximately two years ago to divest the company of certain properties that were located outside of the New York metro area. Over the past two years, we have sold our warehouse properties in Dallas and St. Louis, our shopping center in Springfield, MA and now our shopping center in Meriden, CT.”

He added that proceeds from those transactions allowed the firm to purchase shopping centers in Pompton Lakes, Wykoff, Kinnelon, Midland Park, and Fort Lee, NJ, Greenwich, CT, Harrison, NY and to reduce debt. “We now have a portfolio almost exclusively located in the suburbs around New York City with an occupancy rate of almost 97% and a leverage level that continues to be among the lowest in the REIT industry," he states. "We purchased Townline Square in 1996 and the property underwent many transformations during our ownership.”

According to the property's website, Townline Square is anchored by Big Y Foods. Other major tenants include Burlington Coat Factory, Michaels, Marshalls, Bath & Body Works, Pet Smart and Panera Bread.

In a major pending transaction, Urstadt Biddle is under contract to sell its underperforming Westchester Pavilion Mall in White Plains, NY to Maple and Broadway Holdings, a wholly-owned subsidiary of Lennar Corp. through its Lennar Multi-Family Communities subsidiary. Lennar is in the approval process to demolish the existing retail mall and replace it with a $277-million high-rise mixed-use project.