The median price for multi-tenant retail in Greater Philadelphiais approximately $100 per sf, according to Marcus & Millichap.However, Village at Cambridge Crossing in Mt. Laurel, NJ traded for$169 per sf, and Regency paid nearly $198 per sf this year for acenter in San Ramon, CA. On condition of anonymity, an area retailbroker tells GlobeSt.com that Regency's price for Gateway "wascertainly north of $150 per sf, probably in excess of $35million."

The seller, Azco Partners, a family firm, owned the 221,840-sfcenter for the past 40 years and, according to Arms, "had nointention of selling." What changed their minds? "Goodold-fashioned persistence," he quips. "Really, it was the overalleconomics. Interest rates and cap rates are at an all-time high,the capital gains tax is at 15%, and Regency had the ability to dosome things that other companies could not do in order to furtherdefer capital gains taxes." The sale included assumption of debt,which Arms would not quantify, cash, and shares of Regencystock.

"Gateway is one of the premier centers in the Delaware Valley,"Arms adds, "and it justified the premium. It has a great locationin a growing, high-income area; and it's virtually 100% occupiedwith good, very stabile tenants." Gateway is anchored by a24,000-sf Staples, a 28,000-sf TJ Maxx, and a Trader Joe's grocery,which plans a 25% expansion. There are about 50 small-shop tenants,including JoAnn's Fabrics, Dress Barn, Outback Steakhouse andFamous Footwear.