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Kimco's $131M Acquisition Of Jantzen Beach Could Pave Way For Additional Mixed-Use Development

Institutional investors are still on the hunt for prime retail properties, especially those that offer some mixed-use development potential. Kimco Realty Corp. acquired such an asset in the 746K SF Jantzen Beach Center open-air shopping mall recently for $131.8M. The property had attracted wide investor interest.

Kimco's $131M Acquisition Of Jantzen Beach Could Pave Way For Additional Mixed-Use Development
Jantzen Beach Center

The Jantzen Beach deal promises to expand Kimco’s redevelopment pipeline through potential outparcel development. Part of the sale included two 6K SF buildings with flexible zoning that supports the possibility of mixed-use development on their sites.

Future development aside, the buyer believed the shopping center is a strong property.

“Jantzen Beach is located in a coastal, in-demand market with significant barriers to entry,” Kimco President and Chief Investment Officer Ross Cooper said.

At about $177/SF, the REIT got the center for considerably less than replacement cost.

Jantzen Beach is the New York-based company’s eighth property in the Portland-Vancouver-Hillsboro MSA, expanding its concentration in the market, where the company also maintains a regional office.

Kimco's $131M Acquisition Of Jantzen Beach Could Pave Way For Additional Mixed-Use Development
HFF Senior Director Nick Kassab

"Opportunities to acquire a top-performing center of this size and scale in the Pacific Northwest are few and far between, so the sale received significant interest from institutional investors across the country," HFF Senior Director Nick Kassab said.

Along with colleague Brian Ley, Kassab repped the seller, South Carolina-based Edens.

The property is 96% occupied, with tenants that include Best Buy, DSW, Ulta Beauty, T.J. Maxx, Panera Bread, Burlington, Home Depot, Petco, Michaels, Famous Footwear and Stanford’s Restaurant. Target and Cracker Barrel occupy ground leases at the center. 

The property's location south of the Oregon-Washington line on Hayden Island gives it a distinct advantage in attracting shoppers from Washington state who are eager to buy goods without having to pay a sales tax.

A footnote to the sale: The mall opened in 1972 on the former site of the Jantzen Beach Amusement Park, and the park's 1921 C.W. Parker carousel remained until the property's latest remodel in 2012. It is unclear where the carousel is now or whether it was part of the transaction, The Oregonian reports.