Regency Centers has just made its first foray into New York with a $72.5 million purchase of Lake Grove Commons with its co-investment partner, First Washington Realty Inc. The property, located on Long Island, is a Class A retail center anchored by the county’s only Whole Foods. The property was purchased from Blumenfeld Development Group.
Scott Porter, senior manager of acquisitions for Regency, called the location “a strong foundation” for his firm’s entry into one of the top retail markets in the nation. “With an infill location, market-dominant anchors and affluent consumer base, Lake Grove Commons complements Regency’s premier portfolio and will allow us to pursue assets with similar qualities in the Greater New York area,” he said.
Retail, specifically grocery-anchored retail, continues to be on investors’ radar. “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,” Margaret Caldwell, a managing director for Jones Lang LaSalle’s retail group, said in a 2011 year-end report. “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.”
In September of last year, Regency purchased the 187,529-square-foot, H-E-B-anchored Tech Ridge Center in Austin.