Investor gets 650K sf in San Jose as part of $1.3B retail buy from CIM

Necessity Retail REIT pays $175M for The Plant, popular open-air center with multiple big-box anchors

The Necessity Retail REIT's Edward Michael Weil Jr. and The Plant Shopping Center (AR Global, Google Maps)
The Necessity Retail REIT's Edward Michael Weil Jr. and The Plant Shopping Center (AR Global, Google Maps)

A New York investor has made a $175-million bet on a 650,000-square-foot shopping center and restaurant destination in southeast San Jose.

The Necessity Retail REIT acquired The Plant Shopping Center at 1 Curtner Ave. as part of a $1.3 billion commercial investment package of 81 properties, the San Jose Mercury News reported.

The seller was a subsidiary of CIM Real Estate Investment Trust, a unit of the Los Angeles-based CIM Group, according to a press release.

“The Plant is a highly desirable asset in the portfolio of open-air shopping centers we have acquired in 2022,” Michael Weil, chief executive officer of Necessity Retail, said in a statement.

The 55-acre center at Curtner Avenue and Monterey Road opened in 2007 as a redevelopment on the site of a former General Electric motor plant, in an area with a dense residential population but few retailers. Some of the old GE structures were retained in the development.

The popular shopping center is now home to around 60 stores, including Target, Home Depot, Best Buy, Famous Dave’s, Panera Bread, Applebee’s Grill + Bar, Ross Dress for Less and Ulta Beauty.

Necessity Retail is betting that it can be successful with retail and restaurant complexes whose anchors include big-box retailers, despite the economic uncertainties unleashed by the coronavirus, alongside the shift to online shopping.

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“Our properties are located in strong suburban communities and are the brick and mortar locations that represent the last mile in retail, the places consumers continue to visit every day to receive goods and services,” Necessity Retail said on its website.

“We are witnessing a retail renaissance.”

The Plant Bistro restaurant recently signed a lease, said James Chung, founder and principal of The Econic Co., a commercial broker seeking tenants for the shopping center. Restaurants are also negotiating leases for two more spaces.

Among the empty spaces are sites formerly leased to Toys ‘R Us, a defunct toy retailer, and OfficeMax. Yet even these are drawing interest.

“More investors and tenants are looking in the market for these kinds of power centers,” Chung told the newspaper. “I’m bullish on the opportunities for a center like this. There is a lot of tenant interest in The Plant.

“This is a great asset.”

[San Jose Mercury News] – Dana Bartholomew

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