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| June 7, 2004 |
Strawberry Village sells for $70 million
Dan Wald & Mark Koenig, BT San Francisco/Terranomics |
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Escrow closed today on the $70 million sale of the 155,000sf Strawberry Village Shopping Center to a Massachusetts pension fund affiliated with Chicago-based LaSalle Investment Management, according to the seller, the University of California. The university got easily $10 million-$15 million more for cardiac research out of the deal by spending three years securing entitlements for a major renovation and repositioning project before putting the property on the market, according to one of the brokers in the transaction.
At $455/sf, the transaction sets a record for Bay Area shopping center deals, says institutional investment specialist Dan Wald of BT Commercial/Terranomics. He and Mark Koenig, also of BT/Terranomics, represented the university in the deal. Comparable recent shopping center sales are Larkspur Landing in Larkspur for $347/sf earlier this year and Ghirardelli Square in San Francisco for $354/sf.
However, price per square foot is less meaningful in the Bay Area than elsewhere because of the high cost of replacing centers, Mr. Wald says.
Major factors were replacement, high median household income of surrounding residents (among the highest in the region at $92,250), potential for attracting better revenue-generating tenants, and entitlements for several million dollars in planned renovation and construction. These factors helped generate "phenomenal" investor interest when the neighborhood center was listed in January, Mr. Wald says. The university received 38 offers from local and national investors.
Mill Valley-based Shelter Bay Retail Group, which will continue to manage the center, helped the university secure entitlements for renovating and expanding the anchor tenant, Safeway, from nearly 32,000sf to about 45,000sf. Other pending work includes a main street through the center, a central plaza with surrounding restaurants, and new retail space. The development process on that work could begin in a couple of months.
Samuel Neider built Strawberry Village in 1961 and bequeathed part ownership to the university in 1982 for use in an endowment for heart medicine research.
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