DDR Corp. of Beechwood, Ohio, has divested itself of both of the prominent Treasure Valley shopping centers that it built and owned for many years.
Pine Tree LLC of Northbrook, Illinois, in partnership with a U.S. state pension fund, acquired the 527,000-square-foot Meridian Crossroads shopping center on Feb. 8 at Idaho’s busiest intersection, Fairview Avenue and Eagle Road, for $78.7 million.
Earlier, RCG Ventures of Atlanta, Georgia, acquired the 442,706-square-foot Nampa Gateway Center Nov. 17 for an undisclosed amount. The Canyon County Assessor lists an assessed value of $41.7 million for the 72-plus acres that RCG owns.
DDR Corp. built both shopping centers, Meridian Crossroads in 1999 and Nampa Gateway in 2007.
Meridian Crossroads is thriving with national tenants such as Wal-Mart, Bed Bath & Beyond, Old Navy, Cost Plus World Market and the new Albertsons premium, 109,000-square-foot Market Street Idaho supermarket set to open in fall.
In contrast, Nampa Gateway Center is half empty, including a vacant former Macy’s store.
Pine Tree previously owned the Southshore Shopping Center from 2007 to 2016 at Parkcenter Boulevard and Apple Street.
“We are very excited about this acquisition as we believe that the Meridian Crossroads shopping center is a model for success in today’s rapidly evolving retail environment,” said Hal Scudder, chief investment officer at Pine Tree, in a news release. “We were attracted to Meridian Crossroads because of its unique location, high traffic counts, and its healthy and diversified mix of local, regional and national tenants.”
DDR did not immediate respond to requests for comment.
Pine Tree had had an eye on Meridian Crossroads for a while before Boise broker Mark Bottles approached Pine Tree with the center’s availability, said Graham Grochocinski, Pine Tree’s executive vice president of brand, creative and omnichannel marketing.
“(The Treasure Valley) is a great market,” Grochocinksi said. “We would love to find more projects there.”
Pine Tree owns 23 shopping center in 12 states, including ones in Vancouver, Washington, and Sparks, Nevada.
Nampa Gateway Center struggles
In Canyon County, the new owners of the Nampa Gateway Center are banking on soaring population growth and recent adjacent development to turn around a shopping center that has struggled since opening a decade ago, a few months after the larger Treasure Valley Marketplace.
RCG Ventures LLC of Atlanta inherited a half-vacant shopping center anchored by an empty 103,000-square-foot Macy’s building.
RCG acquired the 442,706-square-foot Nampa Gateway Center Nov. 17 from DDR Corp. of Beechwood, Ohio, the center’s developer and owner since it opened in 2017. The sale price was not disclosed but the Canyon County Assessor lists an assessed value of $41.7 million for the 72-plus acres that RCG owns.
RCG is actively seeking tenants to fill 223,907 square feet of vacancies. JC Penney, Edwards Theatres and Circustrix are the only larger tenants with another eight tenants filling a combined 29,000 square feet.
“We are still evaluating a long-term vision for the center,” said Randy Garfinkle, RCG’s director of investments. “The Nampa Gateway Center is in a strong growth corridor.”
Nampa Gateway Center also has 18.1 acres of undeveloped parcels at the edges for which RCG seeks prospective tenants, he said.
Garfinkle cited the adjacent openings of WinCo in March, the new Saint Alphonsus Medical Center Nampa I-84/Garrity in September, the 256-unit Station Apartments at Gateway that opened in November 2016, and nearby planned expansion plans for College of Western Idaho.
Mike Peña, who handles brokerage services in Nampa for Colliers International, described Nampa Gateway as a combination power center and lifestyle center that has not excelled at either concept. He added the nearby 700,000-square-foot Treasure Valley Marketplace has always had dibs on landing most of the national retailer players for Canyon County.
“I think it’s safe to assume (the purchase price) was below the cost of the original development,” Peña said. “I think (the prospects) are probably good. They have flexibility with the type of deals they can do. They can be more creative. They are open to non-traditional uses.”
Garfinkle said RCG will seek local, regional and national tenants and “alternate uses,” such as libraries, paintball facilities or churches. Alternate uses have become common in shopping center as traditional retail has become wobbly in the internet age.
RCG Ventures, established in 2003, specializes in acquiring value-added properties – buying at a low price and improving properties to garner higher rents. The company owns 91 properties with 11.3 million square feet – including 87 shopping centers – in 23 states but only four are in western states, all acquired in 2017 in Nampa, Denver, Sparks, Nevada, and Cottonwood, Arizona.
“All four of those are in strong retail locations with value-added opportunities,” Garfinkle said.
Nampa Gateway Center is “one of our largest centers,” Garfinkle said, though Nampa Gateway appears to be RCG’s largest center listed on the company’s website.
Macy’s continues to lease and control its vacant Nampa space, which Colliers has listed at $9.585 million.
“We look forward to working with Macy’s to look for opportunities for the site,” Garfinkle said.