Donahue Schriber Continues Expansion in Bay Area
- Jan 23, 2015
Who says retail is a lagging CRE asset? Donahue Schriber Realty Group reportedly shelled out $111 million for Village Oaks Shopping Center in San Jose.
Apparently, demand for newly built class A shopping centers with star tenants is always en vogue.
“Village Oaks presented a rare opportunity to acquire a newly constructed grocery-anchored shopping center that was developed by one of the best in Northern California, Hunter Properties,” said David Mossman, CIO of Donahue Schriber. “The quality of the real estate and tenants also made it an easy decision.”
Built in 2014, the 320,000-square-foot retail space, previously owned by Hunter/Storm L.L.C. and JV partner PCCP, quickly attracted the likes of Target, Safeway, Petco, Party City and a slew of other anchor tenants. Restaurant and fast food operators include: Panera Bread, MOD Pizza, Five Guys Burgers & Fries, and Chipotle Mexican Grill, among others.
The community center is located at the intersection of Cottle Road and Great Oaks Parkway, between Highway 101 and State Route 85. The site is part of the City of San Jose’s Hitachi Transit Village master plan, the largest infill development project in the region, according to a news release.
The San Jose purchase is a resurgence for Donahue Schriber into the Bay Area market. Last year, the company bought a Safeway anchored 72,000-square-foot Downing Center, located at Union Avenue and Los Gatos Almaden Road, in Los Gatos.
But the company isn’t stopping there.
“Donahue Schriber is actively seeking retail property acquisitions in high-barrier-to-entry locations with solid demographics,” Mossman told Commercial Property Executive. ” [We] have another urban Bay Area acquisition under option to purchase. Our commitment to the Bay Area specifically is very strong. We look forward to other key acquisitions in 2015.”
Donahue Schriber is a privately held REIT that invests on behalf of two capital partners — the JP Morgan Strategic Fund and New York State Teachers Retirement System. The company owns 70 shopping centers representing more than 11 million square feet of retail space throughout California, Nevada, Arizona, Oregon and Washington.
Silicon Valley’s retail market, is fueled by one of the highest household income levels in the nation, which is attracting retailers to the metro’s limited amount of vacant space, according to a 3Q2014 San Jose Retail Research Report by Marcus & Millichap.
“When current average household income and the increase in households in the market are combined, the amount of income flowing into the San Jose economy is 44 percent above the level at the height of the dot-com boom. Retail spending is nearly 50 percent above the rate in 2000, which bodes well for local retailers,” per report. ”