New York JV Pulls South Philly Shopping Center Off Market

A New York-based joint venture decided against selling their South Philadelphia shopping center, instead refinancing it for half of what it was expected to fetch in a sale.

DRA Advisors and KPR Centers pulled the Quartermaster Plaza off the market in the latest vote of confidence in the 456,000-square-foot retail hub, the Philadelphia Business Journal reported. The owners put it up for sale in June, only one year after acquiring the property.

The partners purchased the complex another New York firm, Cedar Realty Trust, for $100 million. It was part of a larger sale of a 33-asset portfolio, including grocery-anchored shopping centers in eight northeastern states, for $840 million.

The joint venture initially planned on adding value through leasing before turning around and selling. After finding no takers, however, they instead refinanced the property for $55 million with a five-year bank loan.

The shopping center at 2200 Oregon Avenue is 20 years old and is 99 percent leased, anchored by BJ’s Wholesale Club and Home Depot. A Sprouts Farmers Market is expected to open this year.

The weighted average lease term is eight years. Almost all of the gross income at the property stems from national and credit tenants, including Bank of America, Planet Fitness and Walgreens.

A JLL Capital Markets team including Jim Galbally and Michael Pagniucci arranged the loan.

On the other side of the Philadelphia metro area, another major retail asset could be facing a shuffle. Brookfield Properties this month listed a mall for sale in Bensalem, a suburb of Philadelphia. The 1 million-square-foot mall could sell for around $25 million, boosted by the site’s redevelopment potential.

— Holden Walter-Warner