First Washington Realty Trust Inc., owner of the Valley Center on Reisterstown Road, has added a second Pikesville holding by acquiring the Festival at Woodholme shopping center, the Bethesda-based real estate investment company announced yesterday.
In an essentially no-cash deal, the firm paid $14.8 million for the center by assuming about $12.7 million in debt currently on the property, picking up the transaction costs and issuing 95,877 shares in First Washington to the current owners, Samuel Rose and Stewart Greenebaum, of Rose & Greenebaum, a Baltimore development firm.
"We have been very happy with the Valley Center and with Pikesville, which is an excellent area for retail to begin with and has been showing excellent housing growth in recent years," said Stuart D. Halpert, First Washington's chairman and chief executive officer.
The new owner's first change in the upscale, 28-store strip mall will be to add a Starbucks Coffee shop in a store recently vacated by Kemp Mill Records, Mr. Halpert said.
Existing tenants include Pier One Imports, Sutton Place Gourmet, TCBY Yogurt, Kenny Rogers Roasters, U.S. Air and Chase Bank.
The sale does not include two new buildings usually associated with the center -- the recently opened Bibelot, a supermarket-size bookstore, and Sinai Fitness center, still under construction to house an operation that will be managed by Sinai Hospital. Those properties will remain with the present owners, Mr. Greenebaum said.
"We took over the center about four years ago with a 30 percent vacancy rate, improved the tenant mix and added Bibelot and Sinai, both of which add value to the center even though they are not being sold with it," Mr. Greenebaum said.
"It is now a premium mall with premium tenants, and it commanded a premium price -- you could buy two shopping centers for the square-foot price this one got," he added.
The Woodholme property was the only shopping center owned by Rose & Greenebaum, who mainly develop land and develop and operate office buildings, so once the upgrading was completed, "it was time for the property to move on to the hands of people who are active in operating shopping centers," Mr. Greenebaum said.
At 81,000 square feet, First Washington's new acquisition is about one-third the size of its existing Pikesville stake, the Valley Center.
But the Woodholme center's tenants "are doing a lot of business, and we put a lot of priority on that consideration when we look at a property," First Washington's Mr. Halpert said. The acquisition "positions us very well in a submarket that we like very much," he said.
The purchase brings First Washington's portfolio of centers to 21 in six states and the District of Columbia, with about 2 million square feet of shopping area.
First Washington shares closed yesterday at $17.3125, up 31.25 cents, in over-the-counter trading.