Dealmaker: Westwood Financial Pays $25M for Charlotte, N.C. Shopping Center

Westwood Financial, Los Angeles, acquired The Arbors at Mallard Creek, a 55,000-square-foot Trader Joe’s-anchored neighborhood center in Charlotte, N.C., for $25.1 million.

“This center has commanded historically high renewal rates and strong leases with scheduled rental increases, providing stable cash flow and upside potential,” said Westwood Financial Co-CEO Joe Dykstra. “As one of the primary retail centers in Charlotte with the only Trader Joe’s in a 10-mile radius, the asset faces limited competition.”

Dykstra noted Trader Joe’s outperforms other fresh-format and traditional grocery stores in sales per square foot because proprietary brands make up 80 percent of its store merchandise. The grocer owns 464 stores throughout the U.S.

Located in Charlotte’s University City neighborhood, the 98 percent occupied Arbors at Mallard Creek serves an affluent community. The average household income within one mile radius exceeds $120,000.

“Charlotte has emerged as a financial powerhouse and currently ranks as the second-largest financial center in the country,” Westwood Co-CEO Randy Banchik said. “The market has demonstrated rapid growth and strong employment gains across all sectors, especially in the financial industry. Based on these fundamentals, this retail center is well-positioned to cater to local businesses and nearly 90,000 employees within a five-mile radius.”

In June Westwood sold Tatum Plaza, a neighborhood shopping center in Phoenix suburb Cave Creek, Ariz. for $9.45 million. Retailers including Baskin-Robbins and Papa Murphy’s occupy 98 percent of the 29,500-square-foot center. Fry’s Food & Drugs shadow-anchors the property.

Westwood acquired Tatum Plaza in January 2014 and increased occupancy net operating income and cash flow since then.

“Westwood’s investment thesis has always been to target markets with favorable demographics and long-term growth potential, which is what we did with this asset,” Dykstra said. “We identified the Phoenix MSA as a market poised for strong employment gains and expansion and capitalized on this rapid growth to realize the asset’s full potential during our ownership.”

Banchik said retail remains a “viable” asset class for investors, “provided the center offers a diverse, high-quality tenant mix in a desirable location with strong demand drivers,” he said.

Cushman & Wakefield Executive Managing Directors Ryan Schubert and Michael Hackett buyer SWC 28th and Peoria Investors LLC as well as seller Westwood in this transaction.