The Shops Ledgewood Commons at 461 Route 10 in Roxbury — File photo/Courtesy: Advance Realty Investors
By Joshua Burd
Urban Edge Properties has acquired a newly redeveloped, 448,000-square-foot shopping center in Morris County for $83 million, the real estate investment trust announced this week.
Located on Route 10 in Roxbury, the property known as The Shops at Ledgewood Commons is home to the likes of Walmart, Marshalls, Burlington, Ulta, Starbucks and Chipotle. They’re among the many tenants at the former Ledgewood Mall site, which Advance Realty Investors deconstructed and repurposed as an open-air shopping center starting roughly seven years ago.
Urban Edge closed on its acquisition in early April, highlighting the deal on Tuesday during its first-quarter earnings report. The initial capitalization rate on the transaction was 7.9 percent, the REIT said, noting that it’s expecting future growth from two preapproved but undeveloped outparcels totaling 20,000 square feet and the lease-up of small shop vacancies.
Urban Edge noted Tuesday that it secured a new five-year, $50 million mortgage for the property with a fixed rate of 6.03 percent, while it’s projecting the first-year cash yield on the investment to exceed 10 percent.
Cushman & Wakefield’s Gary Gabriel, Frank DiTommaso, David Bernhaut, Andy Merin and Max Helfman represented Invesco and Advance in the sale, while the firm’s John Alascio, TJ Sullivan, Chuck Kohaut and Mitch Rothstein secured acquisition financing on the buyer’s behalf. Meantime, Mark Gilbert, C&W’s head of retail capital markets for the Americas, was also involved in the sale and financing.
The Ledgewood Commons deal followed Urban Edge’s acquisition earlier this year of Heritage Square, an 87,000-square-foot shopping center in Watchung.
“We’d love to find more assets like Ledgewood, and our team is busy evaluating anything that could be a fit,” Chairman and CEO Jeffrey Olson said during the REIT’s earnings call, according to a transcript. “The current interest rate volatility greatly benefits buyers like us who are both well capitalized and highly trusted by sellers, brokers and lenders. I believe we are at the top of that list in our markets.”
The property’s anchor tenant, the 164,087-square-foot Walmart Supercenter, opened in fall 2020 as part of an expansion of an existing store. Advance’s project also involved moving the existing Marshalls to a more prominent location and adding new retailers and food operators.
“Our partnership is proud of the creativity and the resulting execution in taking this once obsolete regional mall and reimagining it into a thriving Class A power center,” said Alex Cocoziello, an Advance Realty principal and the firm’s chief investment officer. “From development through disposition, our team’s dedication to effectuating the business plan remained diligent, resulting in a new pillar for the community with a great roster of nationally branded tenants the citizens of Ledgewood and Morris County will enjoy for years to come.”
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