Heitman Buys 866 KSF Regional Power Center in Bay Area

By Keith Loria, Contributing Editor

In what could be the largest retail property sale in the Bay Area in 2013 in terms of size, Heitman acquired Pacific Commons Shopping Center, an 80-acre outdoor mall in Fremont, Calif., from an affiliate of Catellus Development Corp., a TPG Real Estate investment.

HFF marketed the property on behalf of the seller. The price was not disclosed.

The sale of the 865,783-square-foot regional power center did not include The Block, a 25-acre retail zone next to Pacific Commons, which Catellus will continue to own and manage.

“Pacific Commons Shopping Center is a best in class asset built to the highest construction standards, an exceptional location with strong demographics and high visibility off of I-880 with over 370,000 cars passing by per day,” Nicholas Bicardo, HFF’s managing director, told Commercial Property Executive. “Finally, the Property was 97 percent leased to a stellar line up of credit tenants representing approximately 86 percent of the GLA.”

The shopping center is anchored by tenants such as Lowe’s, Costco, Nordstrom Rack, TJ Maxx, HomeGoods, Staples, Kohl’s, DSW, Target and Cinemark Century Theaters.

Completed in phases between 2004 and 2006, Pacific Commons Shopping Center is part of a larger approximately 1.2 million-square-foot retail development situated within an 840-acre mixed-use master planned community that also includes 1.1 million square feet of office/R&D and light industrial space, an 11-dealership auto mall, 440-acre wetland preserve and a 153-acre land parcel with entitlements for 3.4 million square feet of additional office, R&D and retail.

According to Bicardo, a lack of quality core retail in Northern California coupled with an explosive amount of capital on the sidelines targeting this profile asset made it the right time for such a deal.

“In addition to being the most dominant and highest quality retail center within a 10-mile radius, Pacific Commons represented one of the only opportunities of 2013 to deploy $100+ million of equity into a core retail asset in Northern California in an environment where there continues to be absolute dearth of product,” he said. “The location is a key attribute to the appeal of this asset with some of the highest traffic counts in the Bay Area; strong average household income of $120,000 and a population of nearly 400,000 and a daytime population of 240,000.”

The HFF investment sales team representing the seller comprised Bicardo, director Mark Damiani and managing director Bryan Ley.