ALAMEDA, CA-Portland, OR-based Harsch Investment Properties has sold Alameda Towne Centre, a 600,000-square-foot community shopping center here, to Atlanta-based Jamestown Properties, for $181 million. The deal involved $111.4 million in debt and $69.6 million in cash. Prudential Mortgage Capital Co. was the lender.
Acquired by Harsch Investment Properties in 1979, the company has continually improved the property, and in 2002, it embarked on a $75-million redevelopment plan, which was completed in 2010. The renovation is an excellent example of a developer who did not want to create another cookie-cutter shopping center that could be found in any geographical market, according to a prepared statement.
“We believed Alameda Island to be a unique community within the Bay Area. While conveniently located close to Berkley, Oakland, and San Francisco, it retains a small town charm with neighborhoods where people know each other and watch out for each others kids like communities used to be,” says Jordan Schnitzer, president of Harsch Investment Properties. “We felt the island deserved a retail redevelopment that reflected its values. To me those values meant creating a shopping center environment with a sense of timelessness—a place you felt at home.”
The large German-based fund was selected as the buyer, according to Schnitzer, “due to their reputation of maintaining properties for long term ownership.” Built in 1958, the 47-acre South Shore Center was purchased in 1979 by the family-owned real estate investment. “What made Alameda Towne Centre such an interesting construction challenge was that the redevelopment had to occur over several years in order to relocate and/or maintain over 125 existing tenants,” says Randy Kyte, head of development for Harsch Investment Properties. “The $85 million renovation and reconstruction of 14 building structures and the complete replacement of the common mall area improvements and upgrades to all the parking lots had to take place while the shopping center stayed open for business.”
The project was a “culmination of eight years of retenanting and repositioning bringing up to date physically a property which already had a spectacular location,” says James Pate, senior vice president of retail for Harsch. Of the over 70 name tenants that call Alameda home, some include Kohl’s, Trader Joe’s, TJ Maxx, Safeway, Borders, Old Navy, Bed Bath & Beyond and Petco.
Phil Voorhees, SVP and Todd Goodman, SVP of CB Richard Ellis Inc., based in Newport Beach, CA represented the sellers. As for reasons for selling the property, Voorhees explains that “Jordan Schnitzer approached our firm about refinancing or selling part of the center in 2010.” He explains that CBRE undertook a marketing effort and found that the appetite for buyers of trophy properties was very aggressive. “We sent out over six hundred flyers, received over 57 signed confidentiality agreements, and were presented with 18 offers for the property,” he adds.
Alameda Mayor Marie Gilmore says that Harsch Investment Properties has been a wonderful owner of Alameda Towne Centre from the city’s point of view. “They worked closely with the planning department, City Council, and always put the community first,” she says. “Harsch spent three times the city mandated requirement for art”, she continues. In addition, “there are a number of historical panels that highlight the city of Alameda’s history and also the history of the shopping center site itself.”
Schnitzer says, that “while it is sad for us to sell a property that has meant so much to our company for many years, we are excited about the future.” He explains that the proceeds of the sale will “provide us with a significant source of capital to fund real estate acquisition opportunities in 2011 and 2012.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
