Sterling Organization Buys 1 MSF Retail Portfolio
Sterling Organization has closed on the $180.5 million purchase of a 994,000-square-foot portfolio of open-air shopping centers, the company announced on Friday. Located in the Atlanta, Washington, D.C., and San Antonio metropolitan areas, the three properties were sold by SITE Centers.
With the purchase, the West Palm Beach-based private equity firm’s portfolio now spans north of 13 million square feet across 75 properties.
The deal is the second of 2024 for this buyer and seller. In a $42 million deal announced last January, Sterling acquired SITE’s Marketplace at Highland Village, a 205,926-square-foot center located in the Dallas suburb of Highland Village, Texas.
Sterling’s purchase drew on funds from Sterling Value Add Partners IV, L.P., an investment vehicle that includes $600 million of equity. SWAP IV, which closed in June, was oversubscribed from its target by $100 million. Investors range from family offices and endowments to pension plans.
Sterling’s scoop-ups
The largest property in Sterling’s newly acquired portfolio is Village at Stone Oak, a 476,371-square-foot power center in San Antonio. The property is anchored by a mix of clothing and pet accessory retailers, including HomeGoods, Ross, Petco, DSW and ULTA Beauty. An adjacent Super Target is a shadow anchor. Fronting U.S. Route 281, the property is 16 miles north of downtown San Antonio and is within a five-mile radius of 170,000 residents.
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The second-largest property is Presidential Commons, a 264,271-square-foot grocery-anchored center lin Snellville, Ga., an eastern suburb of Atlanta. According to CommercialEdge information, SITE purchased the property in 2007. Anchored by Kroger and located at 1630 Scenic Highway North, the center also includes Burlington, Five Below and Aaron’s on its tenant roster. A population of approximately 193,000 is within five miles of the site.
Fairfax Towne Center is the smallest of the bunch, a 253,392-square-foot property located roughly 18 miles outside of Washington D.C., in Fairfax, Va. CommercialEdge data shows that SITE bought the property for $60.2 million in 2021. Safeway is the grocery anchor, and the property also features a T.J. Maxx and a Regal Cinemas.
SITE’s sales binge
The $180.5 million portfolio deal with Sterling is the latest in SITE’s dispositions of open-air retail properties. Since the beginning of the third quarter, the REIT has made sales worth $714.3 million from 13 different properties, according to Yahoo Finance.
Just this week, the REIT sold Cypress Trace, a 280,000-square-foot grocery-anchored property located in Fort Myers, Fla., for $40 million. In August, SITE made another seven-figure-square-foot disposition, this time for three-property portfolio that it sold to CTO Realty Growth for $137.5 million.
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