August 12, 2024
CRC Completes Sale of 292,000 Square Foot Centre at Hagerstown in Hagerstown, MD
BALTIMORE, MD (August 12, 2024) – Continental Realty Corporation (CRC), on behalf of Continental Realty Fund V, L.P., has completed the sale of the Centre at Hagerstown, a nearly 292,000 square foot regional shopping center located at 17850 Garland Groh Boulevard in Hagerstown, Maryland for $36.25 million. Since CRC’s acquisition of the asset in 2019, the Baltimore-based real estate investment and management company has successfully sold nine of the ten free-standing pad sites at the center for $16.1 million, achieving a blended cap rate of 5.4% on those collective pad sales. With the sale of the shopping center, CRC generated a total exit value of approximately $52.4 million, compared to the company’s purchase price of $23.5 million. JLL represented CRC in this sales transaction.
Privately held and active in 11 states, with Assets Under Management (AUM) exceeding $4 billion, CRC has been a notable player in the retail space over the last decade. The firm has grown its shopping center portfolio by more than three million square feet of space since 2020, with nearly nine million square feet of retail space currently owned and managed. In addition to the retail portfolio, CRC owns and operates a multifamily portfolio containing more than 9,000 apartment homes.
Centre at Hagerstown was a strategic purchase for the firm in 2019 as an investment in Fund V. Located in Washington County, Centre at Hagerstown was approximately 97% occupied at the time of the sale. Anchored by Burlington, Crunch Fitness, Home Goods, Marshalls, PetSmart, Regency Furniture, 2nd & Charles, and Party City, the center consists of nearly 20 retailers and restaurants.
“Centre at Hagerstown is a prime example of our team’s ability to execute a multi-pronged value-add thesis,” said Haley Donato, CRC’s Senior Vice President of Asset Management & Finance. “During our five-year hold period, we brought the center’s occupancy from 79% to 97% by bringing top-tier retailers to the community.”
Notable activity achieved by CRC during its ownership included signing new long-term leases with Burlington, Crunch Fitness, Guitar Center, HomeGoods and Party City. This new leasing activity was complimented by successful renewals of several in-place tenants.
“In addition to the lease-up execution, the parcelization of the pad sites provided considerable cap rate arbitrage and early liquidity events for the investment. We are specialists in executing parcelization strategies. It can be complex but extremely accretive when well executed – we saw that here with Hagerstown,” added Donato.
Positioned at the intersection of Interstate 81 and National Pike (US Route 40), Centre at Hagerstown includes 10 pad sites with direct roadside visibility from both highways. These sites are predominantly leased and occupied by national fast-casual and quick-service restaurant brands. More than 92,000 people reside within a five-mile radius of Centre at Hagerstown, with the average household income exceeding $80,000.
More than 76,000 vehicles pass Centre at Hagerstown per day via Interstate 81, and the center also features a signalized entrance on US Route 40. Shadowing the shopping center are The Home Depot and Walmart Supercenter.
Headquartered in Baltimore, Maryland and founded in 1960, Continental Realty Corporation is a full-service commercial real estate and investment company focused on acquiring and operating retail and multifamily properties. The privately held firm owns and manages a diversified portfolio of retail centers consisting of nearly eight million square feet of commercial space and over 9,000 apartment homes across 11 states, with a portfolio value exceeding $4 billion. For additional information, visit www.crcrealty.com.