Newmark has arranged a joint venture (the “Venture”) between Rosenthal Properties, FarmViewVentures, and H.I.G. Realty Partners for the $110 million acquisition of four grocery-anchored shopping centers (the “Portfolio”) in the Richmond, VA MSA. The Newmark team was led by Co-Heads of the Debt & Equity team Jordan Roeschlaub and Dustin Stolly, along with Director Chase Tagen and Associate Hudson Barineau.
The Portfolio spans 592,000 square feet and is approximately 95% leased to a diversified group of tenants, including Wegmans, Walmart, The Fresh Market and Aldi. The properties offer prominent frontage on major thoroughfares in their communities with barriers to entry for new retail development. With approximately 60 tenants, the Portfolio provides the Venture with attractive cash-on-cash on yields.
The Venture targets offering market tenant improvement packages to tenants, driving rent, lease term, and credit quality. The Portfolio is in mature and infill sections of the Richmond market, providing low market vacancy rates.
“With a diversified rent roll and long-term leases, the portfolio comprises some of the most credit-worthy tenants in the retail industry,” commented Roeschlaub.
“This opportunity was well received by the capital markets community as Richmond has seen a large influx of institutional capital from pension funds, overseas investors, and private equity firms,” added Stolly. Richmond has benefitted during the post-Covid environment as net migration and job growth have continued to benefit the regional economy.
The effort to raise capital for the Venture is part of Newmark’s continued push into equity financing focused on raising capital for single-asset joint ventures and both platform and programmatic joint ventures. Both capital and debt have pivoted away from traditional commercial sectors and found grocery-anchored retail centers very appealing from a risk-adjusted perspective. It is expected for continued institutional interest in this asset class.
