First Washington Realty to sell portfolio for $2.74B
Feb. 18, 2005
Gazette staff

J. Adam Fenster/The Gazette

Penn Station Shopping Center in District Heights, encompassing almost 245,000 square feet, is the largest Maryland property in the nationwide portfolio of shopping centers being sold by First Washington Realty of Bethesda for $2.74 billion.



Eleven shopping centers in Prince George's and Montgomery counties are among the 101 centers nationwide that First Washington Realty Inc. of Bethesda is planning to sell for $2.74 billion to a joint venture of Regency Centers Corp. of Jacksonville, Fla., and Macquarie CountryWide Trust of Australia.

The shopping center portfolio, totaling about 13 million square feet, is owned by First Washington Realty and its joint venture partner, the California Public Employees' Retirement System. The Maryland properties total 1.9 million square feet.

The portfolio is 96 percent leased, according to Regency Centers Corp. information.

The six Prince George's properties, and their anchor stores, are Bowie Plaza, Giant Food; Clinton Square Shopping Center; Mitchellville Plaza, Food Lion; Penn Station Shopping Center in District Heights, Safeway -- which, with almost 245,000 square feet, is the largest Maryland shopping center in the portfolio; Rosecroft Shopping Center in Temple Hills, Food Lion; and Watkins Park Plaza in Kettering, Safeway.

The five Montgomery County properties are Cloppers Mill Village in Germantown, Shoppers Food Warehouse; Goshen Plaza in Gaithersburg, CVS; Takoma Park Shopping Center, Shoppers Food Warehouse; Woodmoor Shopping Center in Silver Spring, CVS; and Firstfield Shopping Center in Gaithersburg, whose tenants include Starbucks and Einstein Bros. Bagels. Other Maryland shopping centers in the portfolio include several in the Baltimore area.

"We thought this was a good deal, coupled with fact that our joint venture partner was reducing slightly its allocation to core real estate, and the fact that market were conditions conducive to a sale and we found the pricing to be fair," said First Washington Realty Chairman Stuart Halpert in a statement. "It is a good time to capture some embedded growth value in the investment."

CalPERS of Sacramento, Calif., is the largest public pension fund in the United States, with assets totaling more than $180 billion, according to First Washington Realty information. The system provides retirement and health benefits to more than 1.4 million state and local public employees and their families.

First Washington Realty is a private real estate investment company that invests with CalPERS and provides advisory and management services to CalPERS regarding the acquisition and operation of neighborhood and community shopping centers.

Martin E. Stein Jr., Regency Centers chairman and CEO, said his joint venture was "excited about this unique opportunity to acquire an outstanding portfolio of infill centers with excellent prospects for growth."

"The combination of population density and household income makes the First Washington portfolio one of the highest ranking in terms of buying power," Stein said in a statement.

Montgomery mall

expansion approved

The Montgomery County Planning Board and officials from the company that owns the Montgomery mall have agreed on a plan to expand the shopping area by nearly 300,000 square feet.

Plans include relocating the food court, adding a 13-screen movie theater with stadium seating -- the mall has a three-screen theater now -- and a fourth as-yet-unnamed anchor store. Construction on the renovation is set to begin in the summer and will take about three years to complete.

The mall, on Democracy Boulevard in Bethesda, underwent major redevelopment in 1991 with the expansion of Nordstrom and in 2001 with the creation of the Hecht's Home Store and the Old Navy wing in the former J.C. Penney location. The mall was renamed Westfield Shoppingtown Montgomery after it was bought by Australian company Westfield Group.

The expanded mall will encompass more than 1.5 million square feet. Westfield officials would not comment on the cost of the renovation. Rather than annexing new land, the mall will expand into its parking lot, and two new parking garages will be built to compensate for the lost spaces.

The expansion will include some outdoor-facing shops and restaurants in response to the nationwide trend of "lifestyle-type" developments, said Jim Agliata, vice president of development for Westfield. "The whole idea is creating this very active, very lively streetscape," Agliata said.

Food Way coming

to New Carrollton

Food Way has signed a lease for a 27,000-square-foot store in the Carrollton Shopping Center in New Carrollton, adding a second specialty food store to Prince George's County.

Food Way specializes in international foods and top-quality fish, meat and produce, said Bill Harrison, director of leasing and development at Carrollton Enterprises, which manages the 360,000-square-foot shopping center. Only two other Food Way stores exist, at the company's headquarters in Hyattsville, and in Virginia.

"We feel they're a valuable edition to our shopping center," Harrison said.

The center, at 8452-8490 Annapolis Road, also includes a Shopper's Food Warehouse, Lowe's and Staples. Food Way replaces Safeway, which closed last fall.

Food Way will open in the summer, when Carrollton plans a grand reopening with new tenants yet to be announced, Harrison said. A pad site of a former BB&T bank is among the vacant spaces.

Commercial real estate news items may be mailed to: Jeremy Bond, The Business Gazette, 1200 Quince Orchard Blvd., Gaithersburg, MD 20878; e-mailed to jbond@gazette.net; or faxed to 301-670-7183.