MIDVALE, UT—California-based Excel Trust has agreed to spend $225.6 million to acquire a portfolio of three retail shopping centers in Utah, one of which it sold immediately.
Mark Lucescu, president of Lucescu Realty announced deal late last week. The sale involved The Family Center at Fort Union in Midvale; The Family Center at Taylorsville in Taylorsville, UT; and The Family Center at Orem in Orem, UT.
The seller was DDR, a Beachwood, OH-based, self-administered and self-managed REIT operating as a fully-integrated real estate company. The buyer, Excel Trust, located in San Diego, is a publicly-traded real estate investment trust that primarily targets community and power centers and grocery anchored neighborhood centers.
An additional component of the transaction was the simultaneous sale of the Taylorsville, UT center from Excel Trust to TriGate Capital, Dallas. TriGate is private equity firm focused on the recapitalization and repositioning of real estate assets throughout the United States. Lucescu represented Excel in both sale transactions and dealt direct with DDR and TriGate Capital.
“It’s an institutional-quality portfolio of centers; blue chip tenant rosters, located in infill locations with high barriers of entry,” noted Lucescu. “DDR did a great job of owning, managing and leasing these centers and Excel will continue that success. The Midvale center is considered by many to be the most dominant open-air center in Utah and the Taylorsville center is situated at the busiest intersection in the entire state.”
The properties are described as follows:
Family Center at Fort Union is a 682,279-square-foot community shopping center, anchored by Walmart, Smith’s Food & Drug, Gordmans, Dick’s Sporting Goods, Bed Bath & Beyond, Babies ‘R’ Us, Ross Dress for Less, OfficeMax, Michaels, DSW and Petco. Walmart and Smith’s, which occupy approximately 126,370 square feet and 65,755 square feet respectively, were both included as part of the sale. Both tenants have long-term leases, fixed rental escalations throughout their primary and option terms and are post strong gross sales. The anchor and major tenants together occupy approximately 70% of the gross leasable area in the center. The blue-chip tenant roster also included Lane Bryant, GNC, FedEx, Chase Bank, Chili’s, Ulta, Verizon, Dollar Tree, In N Out Burger, Starbucks, Supercuts, Jamba Juice, Pei Wei, Five Guys and Chick Fil A. The property is situated in the retail hub of Midvale on an approximate 60-acre parcel at the corner of Fort Union Boulevard and Union Park Avenue. It features excellent visibility and an abundance of daytime office and evening residential traffic. The average household income within a five mile radius is $79,677.
The Family Center at Taylorsville is a 779,439-square-foot portion of a 857,866-square-foot community shopping center, anchored by Shopko, Harmon’s (NAP), FYE Superstore, Sports Authority, Jo-Ann Fabrics, 24 Hour Fitness, Bed Bath & Beyond, Ross Dress for Less, PetSmart, Guitar Center and Dollar Tree. Situated on an 80-acre parcel at the northwest quadrant of Interstate 215 and Redwood Road the property was 75% occupied at closing, which represented an ideal opportunity to add value through leasing, management and redevelopment expertise. Within a 3-mile radius the population is 143,256 with an average household income of $65,904. The property also lies within the city of Taylorsville’s redevelopment zone; a 200-acre area recently designated by the city.
The Family Center at Orem is a 150,667-square-foot portion of a 281,931-square-foot community shopping center, anchored by RC Willey (NAP), Dick’s Sporting Goods,Toys ‘R’ Us (NAP), Babies ‘R’ Us, Jo-Ann Fabrics and Dollar Tree. The Property, located on University Parkway, is across from University Mall (anchored by Macy’s) and near Brigham Young University (45,000 enrollment) and Utah Valley University (36,000 enrollment). Major tenants account for 90% of the leased GLA.
According to Lucescu in discussing the latest market trends, “We expect core and core plus offerings to continue to garner very high investor demand due to the dearth of available inventory and the surplus of capital pursuing these types of offerings. In addition, we anticipate markets like Salt Lake City, Las Vegas, Phoenix, and others outside of the major west coast gateway cities to continue to benefit from the lead created by the burgeoning capital markets in the western US.”
Headquartered in Newport Beach, California, Lucescu Realty has regional offices in Phoenix, and Las Vegas, and plans to open an office in San Francisco later this year.