Quartermaster Plaza in South Philadelphia back on market a year after selling for $100M
Quartermaster Plaza, a South Philadelphia shopping center on Oregon Avenue, is anchored by BJ's Wholesale Club and Home Depot.
A year after buying the Quartermaster Plaza shopping center in South Philadelphia, a joint venture of New York firms DRA Advisors and KRP Centers are looking to sell the property in a deal that could fetch more than $100 million.
DRA Advisors and KRP Centers bought the 456,208-square-foot shopping center last year as part of a 33-property portfolio from Massapequa, New York-based Cedar Realty Trust for $879 million. The sale price of Quartermaster Plaza was $100.1 million, property records show. In 2014, Cedar Realty Trust had bought the property from Cleveland-based Forest City Ratner Cos. for $92.3 million.
The property is anchored by BJ’s Wholesale Club and Home Depot. Sprouts Farmers Market is planned to become the third anchor when it opens late this year or early next in 25,200 square feet.
Though there’s no list price, JLL broker Chris Munley said the property could sell for around $110 million. Before the listing launched, Munley said JLL’s team of listing agents had already received interest from domestic and foreign prospective buyers.
The property is at 2200-2400 Oregon Ave. It was built in 2004 and is now 99.5% leased.
Sitting on 44 acres and with a weighted average lease term of 8.4 years, it appeals to a variety of buyers, Munley said. There’s also room for an additional 90,000 square feet of retail that would be allowed under current zoning.
“We see this as generational real estate,” said Munley, who is listing the property with Jim Galbally, Colin Behr, James Graf and Patrick Higgins. “It’s very rare to be able to acquire property of this size and scale within Philadelphia city limits. To get 44 acres, plus that development upside within it, we just don’t really see that too often.”
Existing tenants include PetSmart, Planet Fitness, Staples, Walgreens, Wendy's, Chili's, Bank of America and Foot Locker. Munley said 96% of the in-place revenue is derived from credit and national tenancy, a plus for a future owner.
DRA Advisors and KRP Centers’ strategy was to add value through leasing and then sell the property, but it differed from a traditional flip since the property was bought as part of the larger $879 million portfolio.
To the west of the shopping center is Hilco Redevelopment Partners’ 1,300-acre Bellwether District, a planned industrial logistics and life sciences hub. To the east is the site of a planned $250 million redevelopment converting a former military clothing factory into a life sciences campus with restaurants and a hotel named the Quartermaster Science and Technology Park.
“It’s a positive reflection of the direction of the city, the viability of investment within the city of Philadelphia,” Munley said of the potential sale and widespread interest from domestic and foreign investors. “And what the belief is of retail demand and economics and commerce for South Philadelphia.”