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REIT Makes First Bay State Buy With $104M Wegmans Shopping Center Deal

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Wegmans At Northborough Crossing.

A New York-based retail real estate investment trust is stepping into Massachusetts with its pending acquisition of a 646K SF, Wegmans-anchored shopping center.

RPT Realty has entered into a purchase agreement with Regency Centers to secure the Northborough Crossing shopping center for $104M, it announced in its first-quarter earnings report this week. The development is anchored by the 138K SF Wegmans and is 95% leased, RPT said.

Northborough Crossing also has a BJ’s Wholesale Club, TJ Maxx and Kohl’s among its tenant roster and is adjacent to a 380-residential unit AvalonBay Communities complex, RPT said. The REIT said the property has an average household income of $148K within a 3-mile radius.

Regency acquired Northborough Crossing from New England Development for $128M in 2012, according to Worcester County land records. The property is managed by Southborough-based Capital Group Properties.

RPT plans to sell pieces of its new property as net-lease investments to its new investment platform, RGMZ, launched earlier this year with sovereign wealth fund GIC Private Limited, Zimmer Partners and Monarch Alternative Capital. The venture plans to invest more than $1.2B in open-air retail.

RPT and Regency, which will announce its first-quarter earnings Thursday after market close, didn't immediately respond to requests for comment.

RPT claimed the Northborough Wegmans is one of the chain’s top-performing locations in the Boston area. The New York-based grocery chain’s Northborough location was its first Massachusetts location when it opened in 2011. Wegmans has since expanded, including a 147K SF location in a former JCPenney at the Natick Mall.

Grocery-anchored retail sales volume is expected to increase in 2021, according to a March JLL report. The firm reported a 4.4% increase in price per SF in secondary core grocery centers over the last year amid grocery spending, which outpaced restaurant spending in 2020.

RPT, which counts 62 retail properties in its largely Midwest and Southern portfolio, reported net income of $15.2M in Q1 2021, compared to a $1.3M loss in Q1 2020. The company attributed an 8.5% decrease in net operating income to the coronavirus pandemic, citing closed movie theaters that had remained closed throughout it.

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