The Davis Companies has made its first investment foray into the Pittsburgh suburbs, buying the Streets of Cranberry in Cranberry Township.
Real estate records indicate a Davis-affiliated firm called DIV Cranberry LLC bought the shopping center for $26.5 million, which translates to a little more than $246 a square foot for the 107,000-plus-square-foot shopping center.
An affiliate of Chicago-based InvenTrust Properties sold the shopping center after originally buying the property before the development was fully completed in 2007 when it was built by Columbus-based Continental Real Estate Companies. InvenTrust did so under a predecessor REIT called Inland Group of Real Estate Companies.
Boston-based Davis, best known in Pittsburgh for its successful renovation of the Union Trust Building downtown, bought the Streets of Cranberry through a $500 million value add opportunity fund, said Jonathan Davis, the founder and CEO of the company and a Squirrel Hill native.
He expects the buy will prove a deal.
"Institutional capital has largely moved away from investing in retail and that's changed the competitive landscape for retail," said Davis. "Not all retail is created equal and not all locations are created equal."
Davis cited the ongoing growth in the Cranberry market and the strong performance of the retail there. The sale price suggests a potential bargain.
The $26.5 million InvenTrust generated in selling the property is roughly the same as what its Inland predecessor paid to buy a majority stake in the Streets of Cranberry 12 years ago.
Davis has hired Chicago-based M & J Wilkow Ltd., the owner of the Waterfront in Homestead, among other Pittsburgh properties, to manage the Streets of Cranberry. Davis follows the company into the northern suburban trade area after M & J Wilkow bought Cranberry Square across Route 19 for a comparable sum this time last year with similar value added expectations.
The streets of Cranberry is about 90 percent occupied as a largely unanchored shopping center featuring such shops and restaurants as Old Navy, First Watch, Chico's, Talbot's, White House Black Market and Houlihan's, among others.
"We think that over time with some care we can upgrade it," said Davis, believing the Streets' more contemporary design and layout will enhance its value in the long run. "There's going to be a sorting out between retail that's positioned for longterm success and the retail that isn't."