Nuveen pays $58.25M for Vons-anchored San Luis Obispo center

Nuveen Real Estate has paid $58.25 million for Marigold Center, a 174,428-square-foot community shopping center at 3900 Broad St. in San Luis Obispo, buying the asset from First Washington Realty in a sale arranged by JLL Capital Markets. JLL's senior managing directors Gleb Lvovich and Geoff Tranchina and managing directors Daniel Tyner and Eric Kathrein represented the seller, and the center is anchored by Vons, CVS Pharmacy and Planet Fitness with a tenant roster that runs from grocery and pharmacy to fitness, sporting goods, restaurants, medical and service uses.

At 91.6% leased at closing, the price works out to roughly $334 a square foot, leaving about 14,650 square feet unspoken for, and Tyner's account of the marketing process points to how Nuveen is likely underwriting that remainder. “Grocery-anchored neighborhood retail with NOI growth potential and high-performing anchors drew broad investor interest throughout our marketing process,” he said, adding that the center should continue to perform at a high level under new ownership. No cap rate was disclosed, so the trade leaves behind a per-foot data point without a yield.

The sale lands in a retail bid that has been running more on tenants than on capital. As this publication noted in August, absorption turned positive and first-half volume reached $33 billion, with tenant interest leading the recovery. Four days earlier, JLL closed the sale of Lena Centers' 110,000-square-foot Bedminster, N.J., grocery-anchored center to Asana Partners, and that transaction carried no disclosed price, so the Marigold trade is the only one of the pair with a number to test. Same brokerage, same week, two centers with similar anchor logic, one public number.

First Washington bought the property in 2017, with JLL arranging that sale as well, so the same shop has now marketed the asset twice. What the seller paid then, and what it cleared on the exit, remains undisclosed. The center is still 91.6% leased after a hold that began in 2017, leaving roughly 8.4% of the building, about 14,650 square feet, for the new owner to lease.

For Nuveen, the value sits in a center anchored by grocery, pharmacy and fitness at that occupancy, where filling the vacant slice is the return kicker rather than the in-place coupon. The next grocery-anchored center to trade in California will show whether $334 a square foot was a full price for the setup.