Buyers bag two grocery-anchored shopping centers

Investors snap up shopping centers in Colonial Heights and eastern Henrico

Originally built in 1967, Colonial Square was renovated upon Publix’s arrival in 2017. (Courtesy of United Hampshire US REIT)

Demand for grocery-anchored shopping centers continues to ramp up, as two more properties in the region changed hands last month in separate deals totaling upward of $44 million.

The Publix-anchored Colonial Square shopping center at 3107 Boulevard in Colonial Heights sold last month for $26.2 million, while the Walmart Supercenter-anchored Eastgate Town Center at 4905-4995 Nine Mile Road in eastern Henrico sold for $18.2 million.

The pair of deals brings the number of local grocery-anchored shopping centers to change hands in the back half of 2021 to four. In September, the Trader Joe’s-anchored Short Pump Station sold for $46.7 million, and earlier last month, GreenGate’s The Row, anchored by Lidl, went for $31 million.

United Hampshire US REIT, a Singapore-based investment firm that focuses on grocery-anchored shopping centers, is the new owner of the 54-year-old Colonial Square. CEO Rob Schmitt said the center is his firm’s only holding in the Richmond region.

“We’re focused on the eastern seaboard. We try to stay within a stone’s throw of the (Interstate) 95 corridor,” Schmitt said. “A food component is very important to us. You get recurring traffic in (the shopping center).”

Colonial Square totals 168,000 square feet and boasts a 99 percent occupancy rate. Northern Virginia-based Berman Kappler Properties was the seller in the deal, offloading the property after owning it for over 20 years. In 2017, it renovated the center upon Publix’s arrival.

The deal has yet to be recorded on Colonial Heights property records but was announced by JLL on Nov. 29. JLL’s Jordan Lex, Daniel Naughton and Bill Moylan represented Berman Kappler in the deal.

Eastgate Town Center was built on the former site of the Fairfield Commons Mall, which was demolished nearly seven years ago. (Courtesy of Colliers International)

A few days prior, Eastgate Town Center sold to an entity tied to Nelson Ayala, a D.C.-based investor and accountant. The Walmart-anchored shopping center boasts a similar occupancy rate to Colonial Square with 97 percent of its 118,000 square feet leased out.

Eastgate is on the site of the former Fairfield Commons Mall, which was demolished in 2015. Arizona-based Bromont Investment Group and local investor Mark Harris led the redevelopment and completed it in 2017.

 Harris had since become the controlling partner of the parcel and was the seller in the deal, which closed Nov. 23 per Henrico property records. Colliers International’s Will Bradley and Mark Williford represented Harris in the sale.

Of the roughly 32 acres that make up Eastgate, about 22 are occupied by Walmart and its parking lot, which the retail giant continues to own. Ayala, who wasn’t available for comment by press time, purchased the remaining 10 acres, which include tenants such as Dunkin’, Planet Fitness and Hibbett Sports.

Sales of grocery-anchored retail centers have been trending upward nationally, said JLL’s Lex, who worked on the Colonial Square deal.

“There is tremendous investor demand for well-performing, grocery-anchored shopping centers, especially with longer-term leases,” Lex said. “There’s a sense that retail has survived the 100-year storm that was COVID, grocery-anchored retail especially.”

Lex added that the increase in local deals could be due to a lack of similar listings in nearby markets like D.C., Raleigh or Charlotte. United Hampshire’s Schmitt echoed that observation.

“If you go to downtown D.C., Georgetown or Alexandria, some of those markets work as well. But there’s a lot more competition, and those properties are a lot more expensive, generally speaking,” Schmitt said.

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