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Oregon's largest open-air retail sale closes for $132 million to Kimco Realty, a New York-based company that owns several shopping centers across the country

COURTESY: PORT OF PORTLAND - Aerials of Hayden Island and the Jantzen Beach area shows an area of mixed usage featuring housing, business and green spacesAn established retail destination is changing hands, like many of America's malls these days.

The Jantzen Beach Center, which includes 758,000 square feet of shops on 67 acres of Hayden Island, has been sold for the price of $131,751,000 to Kimco Realty.

New York-based Kimco Realty owns 517 shopping centers across the nation, making up 84 million square feet across 34 states and Puerto Rico.

The company has specialized in shopping center acquisitions, development and management for more than 50 years. Across Kimco's shopping centers, it has 4,100 tenants.

Kimco is the largest real estate REIT in the country, and they own several properties around Portland including Clackamas Promenade, Gresham Town Fair, McMinnville Plaza, Milwaukie Marketplace, the Oregon Trail Center in Gresham, Powell Valley Junction, Sunset Mall and Tanasbourne Village.

The seller is the State of Michigan Retirement System fund, which is being advised by Edens Development, an East Coast-based large retail developer. Edens and Michigan Retirement hired Holliday Fenoglio Fowler, L.P. (HFF) to represent them.

HFF and its affiliates operate out of 24 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry.

Nick Kassab is the director of HFF capital markets services and commercial real estate, one of the largest commercial real estate capital intermediaries in the U.S. (it also serves the United Kingdom and Ireland).

"We had a good field of buyers that showed up for it," Kassab told the Business Tribune. "That shows deals of this scale here in Portland are very difficult for retailer groups, pension funds or REITs to scale up here in the Pacific Northwest — specifically Portland — so when a good core deal like this comes to market, it's kind of a feeding frenzy."

Kassab handles HFF's retail investment sales platform in the Pacific Northwest, and just facilitated the closing of another $21.5 million shopping center deal in Vancouver, anchored by 24 Hour Fitness and Walgreens.

Originally built in 1972, Jantzen Beach has undergone more than $40 million in renovations and upgrades between 2010 and 2014.

Jantzen Beach Center was originally valued at $150 million when it was put on the market back in early March, according to Real Estate Alert.

Even though the sale price didn't reach what it was initially valued at, the seller was pleased with the pricing.

The shopping center is 96 percent leased, anchored by Target and also home to a Best Buy, Burlington Coat Factory, PetCo, Pier 1, Michaels, Home Depot and a number of restaurants. The Center recently underwent significant redevelopment including improved connectivity and traffic flow.

"Essentially this will make them (Kimco) the largest retail operator in the state, based on rental per square footage," Kassab said.

The center produces $7 million in net operating income and is expected to command $140 million, or a 4.7 to 5 percent CAP rate, according to Real Estate Alert. It generates 5 million trips a year, and is within five miles of more than 195,000 residents.

"They (Edens) took the center through the de-malling process and reconditioned it to a redeveloped power center," Kassab said. "Kimco loves the center, it's right on the Oregon-Washington border so it's positioned well ... to take advantage of price-sensitive shoppers who are traveling across state lines to save on sales tax."

Jantzen Beach Center

SOLD: for $131,751,000

Where: 1405 Jantzen Beach Center

Seller: State of Michigan Retirement System fund

Adviser: Edens Development

Representative: Holliday Fenoglio Fowler, LP capital markets services and commercial real estate

Buyer: Kimco Realty


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