February 28, 2012
By Barbra Murray, Contributing Editor
There is a gap in Class A shopping center offerings in a neighborhood in Petaluma, Calif., less than 40 miles outside of San Francisco, and Regency Centers is planning to help fill it. This week, the REIT kicks off construction of the 378,000-square-foot East Washington Place with an investment of $61 million.
East Washington Place will sprout up on a parcel that was once home to a junior high school. Regency purchased the land, located at a well-traveled intersection on Highway 101, in 2004 for $22 million. The shopping center’s offerings will include a 138,300-square-foot Target store, a 121,000-square-foot anchor space and 118,700 square feet featuring junior anchors, additional shops and office space. The project is on track to reach completion in the summer of 2013.
“East Washington Place has all the key attributes that define a Regency center–market-dominant anchor, a prime infill location and superior demographics,” said Ryan Nickelson, Regency’s vice president of Investments. The REIT added a property meeting the aforementioned profile in January, with the $72.5 million joint venture purchase of the 141,400-square-foot Lake Grove Commons on Long Island. The transaction marked Regency’s entrée into the New York market.
Properties like East Washington Place are playing a large role in the success of the retail market in Sonoma County, where, according to retail real estate services firm Terranomics, first-tier shopping centers in every submarket are experiencing occupancy rates that are head and shoulders above rates at second- and third-tier destinations. In Petaluma, retail vacancies continue to drop at a notable pace, going from 7.7 percent in the third quarter of 2011 to 4.6 percent in the fourth quarter, as per a report by Keegan & Coppin-ONCOR International.
*This story was updated at 8:30 a.m. on March 5, 2012.