Call it the Publix effect.
For the fourth time in as many years, a Publix-anchored shopping center in the Richmond region has sold to an out-of-town firm.
The latest deal was for the Charter Colony Shopping Center at 200 Charter Colony Parkway, which sold earlier this month for $23.8 million. Chesterfield County property records show that San Francisco-based investment firm Bailard was the buyer.
South Carolina-based Edens, which developed the shopping center in 2014, was the seller.
Located near the intersection of Charter Colony Parkway and Midlothian Turnpike, the shopping center totals about 73,000 square feet and has other tenants including O’Toole’s Restaurant and Irish Pub, Moe’s Southwest Grill and a Virginia ABC store. The center was most recently assessed by the county at $13.1 million.
Prior to Publix’s arrival in 2020, a Martin’s grocery store anchored the center in a 74,000-square-foot building. However, that storefront was too large for Publix and was razed in 2019 in favor of a new-construction 48,300-square-foot shell.
Calls and emails sent to Bailard and Edens went unreturned last week. Per its website, Bailard operates both institutional investment and wealth management divisions, and has no other real estate holdings in the Richmond area.
The other Publix-anchored shopping center deals that preceded this one were: last year’s $26.2 million sale of the Colonial Square shopping center in Colonial Heights; 2020’s sale of the Publix at Virginia Center Marketplace for $8.5 million; and the 2019 sale of the Carytown Exchange for $13 million. In the Carytown Exchange deal, the Goodwyn family, who’d owned the real estate for decades, entered a joint venture with the project’s developer, Florida-based Regency Centers.
Publix entered the Richmond market in 2016 when it bought 10 Martin’s stores in the region following a merger of Martin’s parent company Ahold and Delhaize Group, which owns Food Lion. The first Publix to cut the ribbon in Richmond was its White Oak location, which opened in 2017. The grocer now has 15 stores throughout the region.
The sale of Charter Colony was brokered by John Owendoff from Cushman & Wakefield’s Washington, D.C. office.
Owendoff, who is also managing director of Cushman & Wakefield’s retail team for the Mid-Atlantic, said now that Publix has been in Richmond for a time, investors are more keen on shopping centers anchored by the Florida-based grocer.
“It takes a little bit of time for investors to get comfortable. Publix is gaining steam, they’re gaining market share, they’re here to stay,” Owendoff said. “The market is really strong for grocery anchored retail, and for Publix in particular.”
He added the timing is doubly advantageous for buyers of Publix centers since many of the leases Publix acquired from Martin’s have expired and the grocer has renewed for longer terms, typically between 10 and 20 years.
Jordan Lex works as senior director of JLL’s Capital Markets team and has also brokered deals that involve Publix, namely the Colonial Square deal last December. Lex said he thinks Publix’s entrance into Richmond is seen by investors as a success.
“(Reputation) is very important. When we sell grocery-anchored shopping centers, the big risk that buyers have to think about is, ‘What if the grocer leaves?’ Because the whole thesis around buying a grocery-anchored shopping center is that the grocer will be there and it drives consistent shopper traffic,” Lex said.
“Both private and institutional investors view them as a high-quality grocery,” he said of Publix. “They view them as a good bet and a good investment, and we’ve seen aggressive pricing as a result.”
Lex said he regularly talks to his colleagues in the Carolinas, Georgia and Florida — where Publix has the majority of its stores — and the popularity of Publix-anchored shopping centers among investors isn’t limited to Richmond.
“They see similar aggressive pricing and lots of demand for Publix deals,” Lex said. “But really for grocery-anchored deals across the board.”
Added Owendoff: “These things have been trading like hotcakes, for lack of a better word.”
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