The Streets of Brentwood shopping center, an East Bay retail staple, has changed hands in a striking $75.9 million deal. The transaction on Monday, documented in the Contra Costa County Recorder’s Office, reveals a tactful investment move by CenterCal Properties and Heitman. Their collaboration acquired the complex to reinvigorate its status as a local lifestyle hub, focusing on community engagement and enriching the currently offered dining and shopping experiences.
In a move seemingly to quickly assert their presence and begin to add value, the new owners are planning to bring in a new community gathering space and have expressed intentions to integrate more renowned lifestyle brands and restaurants into the center's fabric. According to a Silicon Valley report, CenterCal Properties CEO Jean Paul Wardy pointed out, "We are committed to creating spaces that not only serve as shopping destinations but as community hubs where people can gather, relax, and enjoy a variety of experiences."
The financial contours of the deal highlight a broader trend in the retail market that investors are keen to exploit. The purchase price was about 3.7% lower than the amount paid by the previous owner, Fairbourne Properties, back in 2018. Not only that, but the current price also reflects a 14.8% drop below its $89.1 million valuation as of January, as reported by the Contra Costa County Assessor’s Office. This discrepancy may signal a savvy buy in a fluctuating market or point to a deeper malaise in commercial real estate valuations in the region.
Heitman and CenterCal Properties appear unfazed by the downward trend in property values, seeing potential where others might see risk. "Open-air lifestyle centers have demonstrated strong operating fundamentals post the COVID-19 pandemic," Heitman portfolio manager Gordon Black asserted in the accompanying partnership announcement. He went on to emphasize that the minimal new supply and sustained demand from retailers are positives that should not be overlooked when evaluating prospects for The Streets of Brentwood's future.
The approximate 359,000-square-foot shopping center is situated at a geographical crossroads, dispensing access to the Bay area, Tri-Valley, Sacramento Delta, and the Central Valley. The center has remained a key shopping and leisure destination with primary merchants, including the AMC Brentwood 14 movie theater, Barnes & Noble, and Sprouts Farmers Market. CenterCal and Heitman emphasize their eagerness to engage with the Brentwood community and the tenants to craft the destiny of this retail environment, as signaled in both the Silicon Valley piece and their press statements.
