A joint venture of BIG Shopping Centers USA and M&J Wilkow, Ltd. acquired a portion of The Waterfront, a 1.4 million-square-foot shopping center in Homestead, PA, a suburb of Pittsburgh. Closing October 1, the partnership took 765,000 square feet at the region's second largest shopping center. Sources put the sales price at more than $110 million.
The 265-acre site is located along the Monongahela River and is the former site of US Steel's Homestead Steel Works, once the largest steel mill in the world. Just seven miles from downtown Pittsburgh at Waterfront Dr. and W. Bridge Street, The Waterfront actually spans across three separate boroughs - Homestead, West Homestead and Munhall. The infill location is home to 350,000 people in a five-mile radius insulated from significant competition.
"The Waterfront was once a national showcase of Pittsburgh's post-steel industry," stated Martin J. Sweeney, vice president - acquisitions at M&J Wilkow, Ltd. "We plan to re-capture that spirit and bring this wonderful retail destination to a much higher level."
The retail portion was approximately 90 percent occupied at the time of sale. Nearly 80 percent of current tenants have been there since the center opened in 2001, and last year the AMC Loews attracted more than a million customers. The buyers have planned some improvements to the center as well as many other positive happenings at The Waterfront, according to Sweeney.
"The Waterfront is a great opportunity for both BIG USA and M&J Wilkow to not only enter the Pittsburgh market, but also to add value to the area's vibrant economy," explains Stanley L. McElroy, Jr., president of BIG Shopping Center USA. "We look forward to not only our relationship with M&J Wilkow, but also to working with the three boroughs to ensure the shopping center is a best-in-class product," he added.
The portion that traded includes the power center and lifestyle portions of the multi-tenant retail center, featuring TJ Maxx, DSW, Marshalls, Bed Bath & Beyond, PETCO, Old Navy and Best Buy, as well as an upscale AMC Loews Theaters, Barnes & Noble, The Gap, Dave & Busters, Rock Bottom Brewery and Panera Bread. Not included in the sale were a Lowe's, Target, Giant Eagle, Macy's, Costco and several other outparcels. In addition to nearly 70 shops, The Waterfront also includes 300 residential units, 600,000 square feet of office and R&D space, and three hotels.
"The Waterfront is an ideal example of a performing, value-add retail opportunity in a secondary market that aligns our conservative approach to long-term ownership," continues McElroy.
The sale marks BIG USA's largest single acquisition and brings its portfolio to nearly 5.25 million square feet in 25 retail centers across the country. Established in 1994, BIG USA is an international owner, operator and developer of shopping centers. Chicago-based M&J Wilkow was founded in 1939 and acquires, manages and sells shopping centers and office properties for its account as well as on behalf of institutional investors. Its portfolio aggregates nearly 5.8 million square feet with an estimated value of $950 million.
This acquisition represents both firms’ first entry into Pittsburgh's thriving retail market, which currently boasts a low 4.8-percent vacancy rate, according to CoStar data.
Nicholas Matt, Coleman Benedict, John Pelusi, Gerard Sansosti and Tom Rieck with HFF (Holliday Fenoglio Fowler) in Pittsburgh marketed the property and represented the seller, DDR Corp., in the sale.
Please see CoStar COMPS #2567329 for additional information on this transaction.