Real Estate Company Acquires 7 Grocery-Anchored Properties
Slate Retail REIT, an owner and operator of U.S. grocery-anchored real estate with offices in Toronto and Chicago, has entered into a binding agreement to acquire a portfolio of seven grocery-anchored assets in the Southeast and the Mid-Atlantic region for $106.5 million at a capitalization rate of 7.6%, or $171 per square foot.
The seven acquired properties comprise 623,770 square feet of gross leasable area, and are anchored by market dominant high-credit grocers Harris Teeter, a wholly owned subsidiary of The Kroger Co.; Ahold Delhaize USA banner Food Lion; and Weis Markets.
According to the REIT, “The Southeastern and Mid-Atlantic states offer attractive demographics, including strong population growth, a competitive cost of living, large and well-educated work forces, and favorable tax environments.”
Noted David Dunn, the REIT’s incoming CEO: “We are focused on growth and are excited to build on the foundation we spent the last two years creating. These properties are high-quality, stabilized grocery-anchored assets, which at $106.5 million is the REIT’s largest acquisition to date. The acquisition hits several key investment criteria, including adding scale in growth markets, expanding our relationship with top grocers and improving the overall quality of our portfolio.”
The properties are as follows: Alexander Pointe, anchored by Harris Teeter, Charlotte, N.C.; Bermuda Crossroads, anchored by Food Lion, Richmond, Va.; Gainsborough Square, anchored by Food Lion, Virginia Beach-Norfolk-Newport News, Va.; Harper Hill Commons, anchored by Harris Teeter, Winston-Salem, N.C.; Indian Lakes Crossing, anchored by Harris Teeter, Virginia Beach-Norfolk-Newport News, Va.; Renaissance Square, anchored by Harris Teeter, Charlotte, N.C.; and Stone House Square, anchored by Weis Markets, Washington, D.C.-Baltimore.
Expected to be completed in the second quarter of 2020 and financed with existing balance sheet capital, the transaction is subject to customary closing conditions.
Cincinnati-based Kroger, which operates under a variety of banner names, is No. 2 on Progressive Grocer’s 2019 Super 50 list of the top grocers in the United States, while Ahold Delhaize USA, with headquarters in Carlisle, Pa., and Salisbury, N.C., is No. 4 and Sunbury, Pa.-based Weis Markets is No. 26.