The Safeway-anchored Washington Square neighborhood shopping center is nearly fully leased, including newcomers Five Below, D1 Training and MarinHealth. The sale price was 20% higher than the last time it changed hands just over three years ago.
A Southern California real estate investor on Wednesday paid $67.5 million to acquire a Petaluma shopping center that’s said to have the top-grossing Safeway grocery store in the area.
An affiliate of Brixton Capital acquired the 215,506-square-foot Washington Square neighborhood center at 301 S. McDowell Blvd. from an entity managed by Paragon Commercial Group in the Los Angeles suburb of El Segundo, according to the deal announcement Thursday.
Built in 1971, the nearly 20-acre center at the corner of South McDowell Boulevard and East Washington Street is over 99% leased. Only a nearly 1,700-square-foot space and an ATM kiosk are available.
Since 2022 under Paragon ownership, over 55,000 square feet of leases had been inked at the center, including the Five Below store, D1 Training gym and MarinHealth clinic that opened last year, according to the property marketing brochure.
Other major tenants are Staples, Harbor Freight Tools and Planet Fitness.
“Washington Square is a premier asset in an affluent, supply-constrained market with over 1,200 multifamily units in various stages of development,” said Dan Sutherland, Brixton’s managing director of investments, in the news release. “The limited retail inventory and high barriers to entry made this an ideal addition to our portfolio.”
The center’s Safeway store has sales per square foot of nearly $1,000, according to the brochure. The brokers said that location has the highest per-square-foot revenue for the chain’s stores in a 30-mile radius. The grocer has about two dozen locations in that area.
Brixton has a portfolio of about $2 billion in properties nationwide. Its planned work at Washington Square includes finishing the parking lot improvements, replacing roofs, painting and enhancing the exteriors, upgrading the heating and cooling systems, changing the landscaping and updating the signage.
The purchase price for the center equates to about $313 a square foot, the Business Journal calculated. The price reflects a 20.1% total growth in value, or 6.29% compound annual growth, since Paragon bought it in December 2021 for $56.2 million.
Representing the seller of Washington Square, CCF PCG Petaluma LLC, were Bryan Ley, Eric Kathrein and Warren McClean of JLL. Brixton, via WS Owner LLC, represented itself.
Jeff Quackenbush covers wine, construction and real estate. Reach him at jquackenbush@busjrnl.com or 707-521-4256.