Major Retail Properties Change Hands; More Deals to Come
John Jordan | February 2016
HGAR to Move HQ Offices in April
WHITE PLAINS—While the talk of the real estate industry in the Hudson Valley has been the emergence of the multifamily sector as an economic engine driving growth in the Hudson Valley economy, in early 2016 it has been the retail sector that has grabbed the major headlines with several large transactions closed and several others in the works.
In late January and early February, majority interest in the Cortlandt Town Center in Mohegan Lake and the massive Ridge Hill shopping center in Yonkers were sold. In addition, the Westchester Pavilion Mall in Downtown White Plains is set to be sold by Urstadt Biddle Properties of Greenwich, CT to an affiliate of Lennar Multifamily of Miami. At press time, the Hudson Gateway Association of Realtors was the sole tenant left at the troubled retail property. HGAR Chief Executive Officer Richard Haggerty informed attendees of the association’s Commercial Investment Division meeting (see story on page 1 of this edition of Real Estate In-Depth) on Feb. 4th that HGAR is scheduled to relocate its operations to more than 15,000 square feet of subleased space on the top floor at One Maple Ave., the Source at White Plains on or about April 1.
HGAR’s relocation paves the way for the sale of the property in order for Lennar to break ground on the $275-million redevelopment of the 185,000-square-foot Westchester Pavilion into a mixed-use property that will feature 707 residential units in two residential towers as well as more than 77,000 square feet of retail space and another 16,500 square feet of restaurant space. The project secured incentives from the Westchester County Industrial Development Agency in September 2015 and garnered site plan approval from the City of White Plains on Feb. 1, 2016.
White Plains Mayor Thomas Roach said prior to the Common Council vote to approve the site plan for the former Alexander’s department store site, “This project brings the promise of an enlivened Post Road/South Broadway/Maple Avenue area with more people on the streets shopping, dining and enjoying the many benefits White Plains has to offer. It (also) provides the city with the opportunity to put back into productive use an underutilized and underperforming site, as well as generate increased economic activity and tax revenues.”
Lennar officials had no comment on the approvals granted by the City of White Plains or on when it would close on its acquisition of the property. Willing Biddle, president and CEO of Urstadt Biddle Properties in a statement released to Real Estate In-Depth, stated, “We plan to close on the sale of the property to Lennar after HGAR vacates but the actual date of the closing is not known yet. I assume it will occur some time in 2016.”
Tim Mulcahy, president of Lennar Multifamily Communities Division for the Mid-Atlantic and Northeast, appearing at the Westchester County IDA session last September, noted that Lennar was in contract to acquire the Westchester Pavilion and said he hoped the closing could take place sometime during the first quarter of 2016. At present, neither party involved in the sale has divulged the contracted purchase price.
Other significant deals of late include Forest City Realty Trust selling off its majority ownership interest in the 1.3-million-square-foot Ridge Hill shopping center in Yonkers to partner QIC, an Australia-based investment management firm. The firms created a joint venture ownership of the property in which QIC acquired a 51% equity ownership of the center, while Forest City retained a 49% equity ownership. Forest City is expected to receive total proceeds of approximately $90 million in the deal.
Separately, Forest City also announced that it has entered into a fully executed lease for approximately 100,000 square feet with home-improvement retailer Lowe’s for a new location at Ridge Hill, including an exterior garden center, with anticipated opening in the fourth quarter of 2016.
On Jan. 26, CBRE reported that an entity of Acadia Realty Trust of Rye sold the majority interest of its Cortlandt Town Center in Mohegan Lake to New York Life Real Estate Investors for $107.3 million. Acadia Realty, which purchased the 122,000-square-foot Gotham Plaza shopping center in Harlem for $38.8 million in late January, reported the transaction with New York Life involved 65% ownership interest in the 641,000-square-foot power Cortlandt Town Center. An Acadia fund (Fund III) acquired Cortlandt Town Center, which at the time was 84% occupied, in January 2009 for $78 million. The property is currently 97% occupied. Fund III is also developing a 150,000-square-foot to 170,000-square-foot shopping center directly across the street from Cortlandt Town Center. Jeffrey Dunne, David Gavin and Travis Langer of CBRE’s Metro NY National Retail Investment Group represented the Acadia Realty Trust entity in the deal with New York Life.
If that were not enough, White Plains Mayor Thomas Roach once again recently reiterated prior statements that the Galleria at White Plains shopping center could be sold in the near future. Mall owner Simon Property Group has offered no comment on those reports in the past.
Photo Caption: Ridge Hill shopping center in Yonkers first opened in 2011.