Realty Income Buys Home Depot Site in San Jose for $73M

Realty Income has bought a big-box store leased by The Home Depot in south San Jose for $72.8 million.

An affiliate of the San Diego-based real estate investment trust paid cash for the 141,000-square-foot building at 2181 Monterey Road, which anchors The Plant shopping center, the San Jose Mercury News reported.

The seller was Necessity Retail REIT, based in New York, according to a previous report by the newspaper. The deal works out to $516 per square foot.

A major portion of The Plant, which The Home Depot anchors, was traded this summer at Monterey Road and Curtner Avenue.

In August, Los Angeles-based Arc Capital Partners and Orange-based Milan Capital Management scooped up three parcels at the 650,500-square-foot shopping center for $95 million — $80 million less than it sold for three years ago.

The seller was Necessity Retail REIT. The deal works out to $146 per square foot.

The 55-acre shopping center at Curtner Avenue and Monterey Road has more than 50 stores, including Target, The Home Depot, Best Buy, Famous Dave’s, Panera Bread, Applebee’s Grill + Bar, Ross Dress for Less and Ulta Beauty. There’s parking for 3,000 cars.

Necessity Retail REIT had retained ownership of the big-box building occupied by The Home Depot. Target also owns its own retail building, which wasn’t included in the sale.

Necessity Retail bought the shopping center in 2022 for $175 million, or $269 per square foot. The real estate investment trust acquired The Plant as part of a $1.3 billion commercial investment portfolio of 81 properties.

In a separate deal, Milan Capital bought a long-vacant building that once housed Toys ‘R Us and Babies ‘R Us for an undisclosed price.

Within months of the purchase, Vallarta Supermarkets leased the 65,000-square-feet space for undisclosed terms, for its first Mexican market in the Bay Area, according to the Mercury News.

The Plant opened in 2007, after it had been redeveloped from a former General Electric motor factory, in an area with a dense residential population but few retailers. Some of the old GE structures were retained in the development.

Realty Income, a publicly traded REIT founded in 1969 by William and Evelyn Clark, owns 15,450 commercial properties in 50 U.S. states, the U.K. and six other countries in Europe, according to its website. It has $68 billion in assets under management, according to Forbes.

— Dana Bartholomew