Retail Roundup: Jenkins Sells 50 KSF D.C. Asset, Terramar Acquires Washington State Center for $35M

January 6, 2012
By Barbra Murray, Contributing Editor

Jenkins Row Retail in Washington, D.C.

From coast to coast, retail transactions are closing one after the other. Among the grocery-anchored assets involved in the first deals of 2012 are the 50,600-square-foot Jenkins Row Retail in Washington, D.C., and the 130,800-square-foot Canyon Park Place in suburban Seattle. Edens is the proud new owner of Jenkins Row, having acquired the asset from Jenkins Row Retail L.P., and Terramar snapped up Canyon Park from a Seattle-based family investment company.

Jenkins Row first opened its doors in 2008 on the ground level of a mixed-use project featuring 247 luxury residential condominium units. A 45,900-square-foot Harris Teeter headlines the fully leased property, which is also home to Subway, Signal Financial and GameStop.  Edens acquired the shopping center, marketed by real estate services firm Transwetern on behalf of the seller, free and clear of debt.

Canyon Park, anchored by a 45,800-square-foot OFC grocery store and a 12,000-square-foot Bartell’s Drug, is located in Bothell, a coveted residential community just outside of Seattle. Commercial Realty Group Inc. orchestrated the disposition of the 22-year-old asset on behalf of the seller, which pocketed $35 million from Terramar on the trade.

In addition to being anchored by grocery stores, Jenkins Row and Canyon Park have three other key features in common: location, location, location. Both assets sit in major commercial areas offering a live-work-play environment.

Grocery-anchored retail centers remain a hot investment, as evidenced by Blackstone Real Estate Partners’ pick-up of 36 properties from Equity One Inc. for $473 million this past December. And a recent report by Jones Lang LaSalle found a similar trend. “As investors continue to seek out reliable investments, cap rates will continue to fall only for core properties, particularly urban retail, fortress malls and top-ranked grocery-anchored strip centers, while middle-of-the-road retail products will have valuation issues well into 2012,” Margaret Caldwell, managing director of JLL’s retail group, said. “Average cap rates for strip centers have hovered around 8 percent this year, while strips with grocery stores have been much lower, dropping 50 basis points over the last nine months or so.”