Armada Hoffler to Spend $105M for Virginia Beach Retail Properties
The deal is comprised of 4.1 million operating partnership units each valued at $15.55, assumed mortgage debt of $36 million, and $5 million in cash.
VIRGINIA BEACH, VA—In an off-market transaction between two locally-based firms, Armada Hoffler Properties, Inc. has agreed to acquire two retail centers here that will grow its local portfolio by nearly 500,000 square feet.
Armada Hoffler is planning to acquire the Red Mill Commons and Marketplace at Hilltop retail centers from Venture Realty Group for $105 million. The deal is comprised of 4.1 million operating partnership units each valued at $15.55, assumed mortgage debt of $36 million, and $5 million in cash. The transaction is expected to add $8.1 million of annual net operating income and be immediately accretive to Armada Hoffler’s normalized FFO per share. Both off-market transactions are expected to close in the second quarter of this year. Venture Realty Group will continue to lease and manage the assets.
“We are pleased to add both Red Mill and Hilltop to our portfolio,” says Louis Haddad, president and CEO of Armada Hoffler Properties. “Both are high-quality, well-located retail centers with long histories of healthy rental rate growth, high occupancy, and strong sales volume. We look forward to completing the transaction and creating significant value for both our current shareholders as well as our new OP unitholders.”
“On behalf of the Red Mill and Hilltop ownership entities, we are delighted to enter into this transaction with Armada Hoffler Properties,” says John Gibson III of Venture Realty Group.
The 374,000-square-foot Red Mill Commons is currently 98% occupied and boasts a diverse mix of more than 90 tenants including T.J.Maxx, Homegoods, Dollar Tree, Outback Steakhouse, Walgreens, Panera, Buffalo Wild Wings, Starbucks, and Chipotle alongside shadow anchors Walmart, Target, and Home Depot. The property is located less than five miles from both Sandbridge Beach and Naval Station Oceana—the second largest employer in the city.
Marketplace at Hilltop is a 118,000-square-foot retail center, which is located less than three miles from the Virginia Beach oceanfront and adjacent to the only Whole Foods in the city. The tenant lineup at the property includes a high-volume Total Wine store in addition to Michaels, Panera, Chick-fil-A, and Arby’s. The center is currently 100% occupied.
Yesterday, Armada Hoffler announced it had acquired a controlling interest in the 289-unit Harbor Point apartment community on the Baltimore waterfront.