Mixed bag of factors in $304 psf price on East Bay retail

Demographics helped offset recent trends in retail to keep a shopping center in the wealthy suburb of Danville toward the high end of the Bay Area market in a recent sale.

The 67,192-square-foot Village Shopping Center at 115 Town and Country Drive fetched $20.4 million––about $303 per square foot– when local developer and investor Blake and Griggs Properties bought it from Montair Associates.

Danville is one of the wealthiest cities in the U.S., with an average household income of $220,000. The Village Shopping Center averages about 22,000 customer visits a day, according to Vince Schwab, the Marcus and Milichap agent who represented the seller.

The sale price on the Village Shopping compared with an average sale price of $374 per square foot for retail properties in the East Bay during the first quarter was $374, according to a report by Kidder. Local deals have been rangy, with a recent high on DJM Capital’s acquisition of the Bridgeside Shopping Center in Alameda for $543 per square-feet earlier this month, a price driven in part by demand for “daily needs” retail based on essentially goods and services. Grocers, drug store, medical offices and other such service providers have been strong through the pandemic and hold the potential to fare better amid inflation.

While Danville has some tenants offering essential services, its also features a music school, dance studio and other enterprises geard toward discretionary spending, according to a Marcus and Millichap report.

“Given the strong submarket demographics and consistent tenant demand, this was a highly competitive sales process that led to multiple strong offers to acquire the Village Shopping Center,”, said..

The Village Shopping Center, located at 115 Town and Country Drive, is 67,192 square-feet and has a 97 percent occupancy rate. The shopping center currently has 32 tenants, ranging from essential services to restaurants and office spaces. Some of the notable tenants include: Fitness 19, Danville Chamber of Commerce and Discovery Counseling Center.

“Village Shopping Center is a pillar of the local Danville community, featuring a diverse tenant roster of independently owned and operated businesses that withstood the effects of the pandemic,”

This Danville deal is still more than other recent transactions. An Asian-themened shopping center closed at $209 per square-foot which was below the East Bay average. A more recent transaction in the Silicon Valley market saw a New York-based investor pay about $270 per-square-foot for The Plant Shopping Center, a major open-air mall in San Jose.

The recent data indicated that East Bay will continue to experience a revitalized retail market, with the average asking rent up 12 percent and new construction up 35 percent, according to the Kidder report.

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