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NEW YORK CITY-Acadia Realty Trust plans to redevelop a Washington Heights site as a mixed-use environment featuring more than 300,000 sf of retail, residential and commercial elements at a cost of approximately $40 million. Approximately half of the space will be used for retail and commercial development. The White Plains-based REIT purchased 4650 Broadway--a 140,000-sf building currently occupied by the city and a commercial parking garage--for $25 million.

Acadia plans to start development in the next 12 to 24 months and anticipates completion in another 18 months. In lieu of directly developing the mid-rise residential portion, the company is considering selling its rights, while retaining ownership of the other portions.

This is the third of Acadia's New York Urban/Infill investments. The acquisition was made through AKR Fund II, in partnership with P/A Associates. Acadia previously acquired the Sears Building on Fordham Road in the Bronx and entered into a 95-year ground lease to redevelop a 16-acre site in Pelham Manor into a community shopping center. In a conference call last month, Acadia executives said costs for the Fordham Road redevelopment nearly doubled going from $60 million and $70 million. "As is the case with our two other Urban/Infill projects, this high density and high barrier-to-entry real estate creates extremely strong tenant demand as well as attractive risk adjusted returns," says Kenneth F. Bernstein, Acadia's president and CEO. The company is in negotiations for a redevelopment project in Brooklyn.