SoftBank-Owned Real Estate Firm Buys Petworth Retail Property For $20M
Major investors looking to buy into D.C.'s retail market can have trouble finding large enough properties to feed their appetite, but one firm last month found a place to deploy $20M in a rapidly growing D.C. neighborhood.
Fortress Investment Group, an investment fund manager owned by SoftBank, paid $20.2M for the Safeway grocery store that anchors Petworth's The Swift apartment building at 3828 Georgia Ave., according to the D.C. Recorder of Deeds.
The investor bought the 62K SF grocery store from Safeway's parent company, which had maintained ownership of the retail condo after the building was developed and the apartment portion sold. Duball built the 218-unit project in 2014 and sold the apartments for $75M to Principal Real Estate Investors.
The surrounding Petworth neighborhood has blossomed with a host of new restaurants in the five years since the Safeway-anchored project delivered. Since the start of 2018, Petworth and the adjacent Park View neighborhood have welcomed at least 17 new restaurants and bars.
The Safeway sale was first reported in Dochter & Alexander's Summer 2019 D.C. Retail Market Report. Dochter & Alexander principal Dave Dochter said investors like D.C.'s retail market because of the demographics, consistency and barriers to entry, but most of the city's retail properties are smaller than what they are seeking.
"Getting any sizable piece of retail in D.C. is a challenge, so a lot of groups looking to deploy meaningful equity sometimes have difficulty in D.C.," Dochter said. "When it comes to writing a check, you don't have the options, especially on the urban side, to deploy the amount of capital that they would typically look at [in] other markets."