Heritage Square at 1640 Route 22 in Watchung. — Courtesy: JLL
(Editor’s note: This story was updated Friday, Feb. 23, with additional information from JLL, which brokered the transaction.)
By Joshua Burd
Urban Edge Properties has acquired an 87,000-square-foot shopping center in Watchung for $34 million, completing the deal as part of a flurry of recent moves across its portfolio.
The real estate investment trust said the property, Heritage Square, is an unencumbered asset that’s anchored by Ulta and two TJX Cos. concepts, HomeSense and Sierra Trading. It also includes three outparcels with a fourth currently under construction, boasting a location on Route 22 at the corner of Terrill Road.
The seller reportedly was Seritage Growth Properties, which built the complex in 2019 as part of a redevelopment of a former Sears property. JLL’s Jose Cruz, Kevin O’Hearn, J.B. Bruno and Austin Pierce represented the seller and procured the buyer, noting in a separate news release that the 87,318-square-foot center is also home to CityMD, Starbucks, Chick-fil-A, Ulta Beauty, Miller’s Ale House and Davids Bridal.
“Despite a challenging interest rate environment, both buyer and seller worked together to ensure a successful transaction,” Cruz said. “Retail opportunities have continued to attract institutional capital to the suburban New York area.”
Urban Edge announced the Feb. 8 transaction as part of its fourth-quarter earnings report. It also said that, after Q4 ended on Dec. 31, it went under contract to sell a nearly 95,000-square-foot property in Hazlet for $8.7 million and a 127,000-square-foot building in Lodi for $29.2 million.
The Hazlet property, formerly a vacant Bradlees store, is now leased to Stop & Shop. The Lodi building at 370 Essex St. is a former retail center off Route 17 that the REIT converted to nearly 130,000 square feet of industrial space.
JLL, meantime, added that 50 percent of Heritage Square’s income is generated from credit tenants, while 86 percent is from national retailers. It also has a weighted average lease term of nearly eight years and no rollover until 2029.
“We are excited to add Heritage Square to our growing portfolio,” said Jeff Mooallem, chief operating officer at Urban Edge Properties. “We have worked on several transactions with Jose and the JLL Capital Markets team this past year and they always deliver accurate information, clear communication and the highest level of integrity to the process.”
