The JCR Cos. Buys Retail Space at Lorton Station Town Center for $13.8M
- Jul 07, 2014
The JCR Cos. continues to expand its D.C. area retail portfolio. Shortly after scooping up a 2,710-square-foot retail building housing Cork & Fork in the heart of the thriving 14th Street corridor, the real estate investment firm acquired 51,800 square feet of retail space at Lorton Station Town Center. The price of the transaction was $13.8 million. Regency Centers was the seller.
Lorton Station Town Center occupies the ground-floor area directly above the Virginia Railway Express (VRE) commuter train station. According to a news release, it was fully leased at the time of the sale to 19 local, regional and national tenants — the likes of Wells Fargo, Subway and FedEx. Lorton Station Town Center is part of a larger mixed-use project with more than 170,000 square feet of office and commercial space, as well as almost 1,200 single-family homes, townhomes, condominiums and apartments.
Joe Reger, managing partner of The JCR Cos., said his company plans to reposition about 7,000 square feet of retail space that is leased but currently vacant at the Town Center. JCR intends to hold on to the property for the long term.
“This is our ninth acquisition on 14th Street, which has incredible velocity and is only in its infancy,” Reger said in a statement. “Our Logan Circle portfolio now totals approximately 50,000 square feet of retail space and parking. We continue to seek retail properties both large and small in the District or within one hour’s drive, and hope to acquire more retail assets in the second half of 2014.”
Marcus & Millichap reports that aggressive bidding for retail properties in the Washington, D.C., area has pushed up prices in the past year, boosting sales activity. The average price for multi-tenant assets has reached $352 per square foot. Transactions are limited only by the small amount of for-sale inventory. However, owners currently holding on to their assets are expected to list them in the coming months, motivated by the potential of rising interest rates and intensifying buyer demand.
Average rents have dropped to 5.4 percent over the past 12 months, and will continue to drop to 4.9 percent by the end of the year. Multi-tenant vacancy registered a decrease of 0.8 percent during this period, reaching 5.3 percent. In spite of this improvement, though, vacancy remains 1.9 percent above the pre-recession low.
Average asking rents were $23.97 per square foot in the first quarter of 2014, which represents an annual rise of 4 percent. As vacancies continue to drop, average rents will rise, with an expectation that they will reach $24.44 per square foot by the end of the year. Multi-tenant rents in the region rose 0.8 percent to $23.09 per square foot.Photo of Lorton Station Town Center retail space courtesy of LHB Communications. Charts courtesy of Marcus & Millichap.