Call it the Publix effect.
For the fourth time in as many years, a mall anchored by Publix in the Richmond area has been sold to an out-of-town company.
The latest deal was for the Charter Colony mall at 200 Charter Colony Parkway, which sold earlier this month for $23.8 million. Chesterfield County real estate records show San Francisco-based investment firm Bailard was the buyer.
South Carolina-based Edens, which developed the mall in 2014, was the vendor.
Located near the intersection of Charter Colony Parkway and Midlothian Turnpike, the mall totals approximately 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 recently appraised 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 big for Publix and was razed in 2019 in favor of 48,300 square feet of new construction.
Calls and emails sent to Bailard and Edens went unanswered last week. According to its website, Bailard operates both institutional investment and wealth management divisions, and owns no other real estate in the Richmond area.
Other mall deals anchored in Publix that preceded this one were: last year’s $26.2 million sale of Colonial Square Mall in Colonial Heights; 2020 sale of Publix to Virginia Center Marketplace for $8.5 million; and the 2019 sale of the Carytown Exchange for $13 million. As part of the Carytown Exchange deal, the Goodwyn family, who had owned the real estate for decades, entered into a joint venture with the project’s developer, Florida-based Regency Centers.
Publix entered the Richmond market in 2016 by acquiring 10 Martin’s stores in the area following a merger of Martin’s parent company, Ahold, and Delhaize Group, owner of Food Lion. The first Publix to cut the ribbon in Richmond was its White Oak store, which opened in 2017. The grocer now has 15 stores across the region.
The sale of Charter Colony was brokered by John Owendoff of Cushman & Wakefield’s office in Washington, DC.
Owendoff, who is also managing director of Cushman & Wakefield’s Mid-Atlantic retail team, said that now that Publix has been in Richmond for a while, investors are more keen on malls anchored by the Florida-based grocer.
“It takes a bit of time for investors to get comfortable. Publix is gaining traction, they’re gaining market share, they’re here to stay,” Owendoff said. “The market is really strong for the retail anchored in grocery, and for Publix in particular.”
He added that the timing is doubly beneficial 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 a principal in JLL’s capital markets team and has also brokered deals involving Publix, namely the Colonial Square deal last December. Lex said he thought Publix’s entry into Richmond was viewed by investors as a success.
“(Reputation) is very important. When we’re selling grocery-anchored malls, the big risk buyers need to think about is, “What if the grocer leaves? “Because the whole thesis around buying a mall anchored in a grocery store is that the grocer will be there and that drives constant traffic of shoppers,” Lex said.
“Private and institutional investors see them as a high-quality grocery store,” he said of Publix. “They see them as a good bet and a good investment, and we’ve seen aggressive pricing as a result.”
Lex said he speaks regularly to colleagues in the Carolinas, Georgia and Florida — where Publix has the majority of its stores — and the popularity of Publix-anchored malls among investors isn’t limited to Richmond.
“They see similar aggressive pricing and a lot of demand for Publix offerings,” Lex said. “But really for ingrained grocery offerings across the board.”
Owendoff added, “These things have traded like hotcakes, for lack of a better word.”