Deals for South Bay Safeway centers point to some retail green shoots

SAN JOSE — Deals for Safeway-anchored shopping centers in the South Bay suggest that green shoots have begun to sprout for some types of retail properties despite a tricky post-coronavirus economy.

One center, located in south San Jose, received fresh financing despite a brutal environment for interest rates and picky lenders.

University Shopping Center, a Safeway-anchored shopping center at 2605 The Alameda in Santa Clara. (Maven Commercial)

The other center, with a Santa Clara location, was bought by a family-owned real estate firm from the Bay Area, according to public documents.

Here are some details regarding the two transactions:

— Almaden Safeway Center, located at 4950 Almaden Expressway in San Jose, has been refinanced for $20.5 million, according to JLL, a commercial real estate firm. This center totals 143,500 square feet and is anchored by Safeway. Other notable merchants are Joann Fabric and Crafts and Savers. The center is 100% leased. The property owner, Brothers International Holding, obtained a 10-year fixed-rate loan from RGA Reinsurance Co.

— University Shopping Center at 2605 The Alameda in Santa Clara has been bought for $15.9 million, according to documents filed on Jan. 17 with the Santa Clara County Recorder’s Office.

The transactions, one by a buyer and the other by a lender, involving the two Safeway shopping centers, suggest that investors still hunger for certain kinds of retail, despite the widening uncertainties that menace the commercial real estate market.

The San Jose shopping center is located near ramps to and from State Route 85 and is within a trade area that boasts an average household income of $161,000 a year.

The Santa Clara shopping center is anchored by a Safeway store at 2605 The Alameda, Other tenants are Taco Bell, Round Table Pizza and Wicked Chicken, according to Maven Commercial, a real estate firm that arranged the deal.

Daly City-based Bay Properties, acting through an affiliate, bought University Shopping Center in an all-cash deal from Danville-based Bushnell Management Associates, which is headed by Heesoo Bushnell, the county documents show.

One of the common threads in the transactions is that both centers are anchored by a high-profile and stable supermarket with a familiar brand.

In a flight to safety, investors and buyers appears to be seeking out centers that have stable anchors that supply basic necessities.

“In the past year we’ve seen capital flowing into high-quality anchor-based shopping centers around the San Francisco Bay Area and Silicon Valley,” said Matthew Sheridan, an executive with Maven Commercial. “The level of interest in this asset was phenomenal and earned a slew of offers.”