Excel Trust to Take 750,000-SF Northern California Shopping Center for $92.5M

September 30, 2010
By Barbra Murray, Contributing Editor

Excel Trust Inc. has signed on to acquire Park West Place, a fully leased 750,000-square-foot shopping center in Stockton, California, from Levine Investments L.P. and Pivotal 650 California St. L.L.C. The transaction is valued at $92 million.

The purchase agreement involves a little bit of cash and a little bit of debt. Excel will assume an existing first lien with an unpaid balance of approximately $44.8 million, and fund the remainder of the deal through cash on hand and borrowings under its unsecured credit facility.

Kitchell Development Company built Park West Place, located within the 3,000-acre Spanos Park master planned community about 80 miles west of San Francisco, in 2004. Aside from undeveloped pad sites, there is not a square-foot to spare at the Nadel Architects-designed shopping center. Park West Place is 100 percent leased to a long list of tenants that includes Kohl’s, Lowe’s, Ross Dress for Less and a broad selection of local retail names. Additionally, the likes of Wells Fargo, Bank of America, Starbucks and Sonic Drive-In are among the occupants of the 13 single-tenant outparcels. Excel’s purchase agreement encompasses the entire property, with the exception of Target, which owns its approximately 150,000-square-foot store.

Park West Place’s full tenant roster is hardly representative of the Stockton retail market, which continues to languish. “San Joaquin Valley is more of a niche market and there has been huge downward pressure from high residential foreclosures and high unemployment, which translates to lower retail demand,” Lisa Hodgson, Senior Vice President, Retail Properties, with commercial real state firm Colliers International, told CPE. “Until those major elements of our economy turnaround, there probably is not going to be an uptick in the retail market. It’s going to remain rather slow for the next year or so as the economy rebounds.”

For now, Park West Place is the exception. “The lineup of tenants and the location–it’s visible from the freeway and easily accessible from Interstate 5–makes it a regional trade area draw,” Hodgson said. “That’s why those tenants are there. They need a site like that because they do expect to draw from the regional area. There are some very strong tenants and there is a good representation of smaller shops, so it’s a good mix all around, and it is a very attractive property and well-constructed as well.”

The shopping center’s success, she added, is not likely to wane anytime soon. “A well located project like Park West Place will probably benefit in the long run from this economy because it won’t see a lot of competition from new product in the market. It will stand the test of time.”