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STOUGHTON, MA-A Walgreens-anchored shopping plaza here is part of a two-building package being acquired by Linear Retail Properties of Burlington and Principal Financial Group. The $12.6 million deal includes the 26,000-sf strip center on Route 138 in Stoughton and a 5,500-sf Lenscrafters at 870 Providence Highway in nearby Dedham.

Accommodating the sellers, Linear/Principal has agreed to delay closing on the assets until early 2009, prompting the two sides to strike a master-lease arrangement until the deal is consummated. “We effectively have full control of the properties,” explains Linear President William Beckeman, whose $300-million fund is focused on convenience-oriented retail throughout New England. The latest purchases brings the number of assets acquired since the fund was launched in 2003 to 48, an assemblage valued at $220 million.

Besides a free-standing Walgreens, the Stoughton plaza houses a 2,200-sf Eastern Bank branch, plus a Hertz Car Rental, pizza shop and Starbucks. Linear/Principal will pay $9.1 million for that center, which Linear partner Aubrey Cannuscio terms “a prototypical Linear Retail” investment. “The property offers a strong pharmacy anchor at a key intersection and some additional shop space that, together, offer bullet-proof cash flow and long-term upside,” he says.

The fund is paying $3.25 million for 870 Providence Highway, which is located at the junction of Enterprise Dr., the prime entrance to Gateway Center, a 650,000-sf entertainment/retail complex that broke ground this spring. Cannuscio calls the latter asset a “strategic buy” for other reasons, including his firm’s previous purchase of an abutting complex, leased to a bridal shop, guitar store and Mattress Giant branch. “Together, these properties offer operational efficiencies as well as long-term redevelopment potential on a very prominent retail center,” he says.

Unmotivated sellers and the lingering credit crunch have made it challenging to find opportunities this year versus last, says Beckeman. But while terming the first quarter as “dead,” he notes that Linear/Principal has five buildings under contract to date in 2008, the same number secured at this time in 2007. As the mid-year point approaches, Beckeman says more properties are finally making their way to market. “It seems to be freeing up a little bit,” he reports.

In the meantime, the fund’s managers have proactively pursued properties such as the Dedham and Stoughton centers. Seller John DeMatteo says the owners “were not eager” to harvest their assets, but says “Linear Retail countered our reluctance by offering a good price and a deferred closing that allowed the timing of a transaction to work for us.” The deal was brokered by Kevin Shaughnessy of Collaborative Retail Strategies of Charlestown. Linear also says KeyPoint Partners of Burlington will provide property management services for both assets.

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