Intercontinental Real Estate Buys Seattle-Area Retail Center

Intercontinental Real Estate Corp. has acquired Lakeland Town Center, a 125,233-square-foot grocery-anchored retail center in Auburn, Wash., for $69.5 million.

EDENS, a Washington, D.C.-based retail owner, operator and developer, was the most recent owner of the 12.6-acre, fully-leased shopping center in East Pierce County. The firm acquired the retail asset in March 2022 for $65.8 million from Donahue Schriber Realty Group, according to Yardi Matrix.

Lakeland Town Center, located at 1402 Lake Tapps Parkway SE in the Lake Tapps area, is anchored by Haggen Northwest Fresh, a regional grocer and subsidiary of Albertsons/Safeway. It is the only full-service grocery store serving the Lake Tapps and Lakeland Hills sections.

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Built in 2002, the property consists of both pad and inline retail and has frontage along Lake Tapps Parkway East, with more than 16,000 vehicles passing the site each day. Located about 25 miles south of downtown Seattle, the shopping center is situated in the commercial center of Lakeland Hills, an affluent master-planned community with approximately 52,000 households earning an average of $183,000, according to Intercontinental Real Estate.

JLL Capital Markets Senior Managing Directors Geoff Tranchina and Gleb Lvovich, Managing Director Dan Tyner and Director Tess Berghoff marketed the property for the seller.

Capital program, leasing strategy outlined

Intercontinental is planning a targeted capital program that will include a roof replacement and other upgrades as tenants roll over. The real estate investment firm will also utilize a leasing strategy that will focus on preserving and strengthening the center’s daily-needs tenant offerings.

The company wants to retain a mix of food, fitness, medical services and other necessity tenants that provide services for area residents. Intercontinental noted the center has had consistently strong occupancy over more than 10 years.

In addition to the grocer, tenants include Subway, McDonald’s, Hops N Drops, Rock Wood Fired Pizza, Puerta Vallarta Mexican, Sushi Konami, Ichi Teriyaki, Legendary Doughnuts, Nektar Juice Bar and Menchies. Other tenants are UPS Store, Wells Fargo, Pacific Cataract and Laser Institute, Gentle Dental and Orthodontics, Outpatient Physical Therapy, Orangetheory Fitness, Club Pilates and Edward Jones.

A supply-constrained retail submarket

Jessica Levin, West Coast managing director, and associate CIO at Intercontinental, said in prepared remarks that Lakeland Town Center is the dominant daily-needs destination in the high-income trade area.

The East Pierce County submarket is the tightest in the region at 2.4 percent vacancy rate against a 3.0 percent 10-year average, Levin added. No new construction is underway in the submarket and only 13,000 square feet are proposed over the next eight years. The submarket’s neighborhood center segment has not had any deliveries in six years.