Cohen & Steers, Sterling Pay $127 Million for San Mateo Retail Center

Cohen & Steers and the Sterling Organization have bought a 232,000-square-foot outdoor shopping mall in San Mateo for $127 million.

The New York- and Florida-based investors bought the Bridgepointe Shopping Center at 3000 Bridgepointe Parkway, the San Francisco Business Times reported. The seller was the Teachers Insurance and Annuity Association of America, based in New York.

The deal works out to $547 per square foot.

TIAA bought the Peninsula retail center in 2017 for $125 million, or $539 per square foot.

The 24-acre shopping center, which straddles San Mateo and Foster City, is fully leased, Cohen & Steers said. Tenants include Nordstrom Rack, Ross Dress for Less and Total Wine.

Cohen & Steers liked Bridgepointe because of its location in a “dense, high-income” suburban setting with less retail area than the U.S. average, according to James Corl, head of its private real estate group.

Corl said in a September blog that pricing for open-air, “necessity-driven” shopping centers had hit bottom. Cohen & Steers, he wrote, would be “deploying capital to aggressively take advantage” of market dynamics favorable to the sector.

An unidentified spokesperson for Cohen & Steers declined to comment on its plans for the retail center, built in 1997 on the site of the former San Mateo Fashion Island mall.

The City of San Mateo targeted part of the property as a candidate for residential redevelopment as part of its state-mandated Housing Element, or blueprint for growth. The city must plan for 10,000 new homes by 2031.

The move sparked a lawsuit from local activists, who said Bridgepointe is governed by a 1997 contract that bars construction of any homes through 2056, according to the San Jose Mercury News.

The sale of the shopping center by TIAA came as it sold majority stakes in office properties in San Francisco.

The financial services company sold its stakes in the 445,000-square-foot tower at 888 Brannan Street and a 615,000-square-foot tower at 405 Howard Street to its Norwegian joint venture partner, Norges Bank Investment Management. The transactions were part of a portfolio deal in which Norges bought TIAA’s majority stake in eight office buildings around the U.S. for $976.8 million.

TIAA is also planning to sell its office property at 88 Kearny Street, in Downtown San Francisco, which it has owned since 1999, unidentified sources told the Business Times.

Cohen & Steers, a publicly traded company founded in 1986 by Martin Cohen and Robert Steers, in May had $80.5 billion in preliminary assets under management, according to the firm.

The Sterling Organization, a private equity firm founded in 2007 by Brian Kosoy and Greg Moross, has $2 billion in assets under management, including 74 properties in 19 states, according to its website.

— Dana Bartholomew