Big East Bay retail center is bought, pointing to weak property values
BRENTWOOD — A big East Bay retail center has been bought for more than $70 million in a deal that suggests real estate values have faltered for shopping and restaurant hubs in the Bay Area.
The Streets of Brentwood has been bought for about $75.9 million, according to documents filed on Oct. 21 with the Contra Costa County Recorder’s Office.
Two real estate firms, CenterCal Properties and Heitman, have teamed up through an affiliate to buy The Streets of Brentwood, a retail, restaurant, entertainment and movie hub at 2455 Sand Creek Road in Brentwood, the companies said.
Streets of Brentwood totals 359,000 square feet. The shopping complex’s primary merchants are the AMC Brentwood 14 movie theater, Barnes & Noble bookstore, Ulta beauty and cosmetics, BJ’s Restaurant and Brewhouse, DSW shoe store, Black Angus Steakhouse and Sprouts Farmers Market.
“CenterCal Properties and Heitman plan to collectively reimagine and enhance the center’s offerings that make it a premier lifestyle destination, further solidifying its status as a cornerstone of the community,” the two buyers stated.
The two new owners of The Streets at Brentwood noted that an array of dining and shopping options are present at the retail hub. But they hope to create more enticements.
“Exciting additions are on the horizon, including a new community gathering space for hosting seasonal events and more renowned lifestyle brands and restaurants,” Heitman and CenterCal Properties stated.
The new owners paid less than what the seller plunked down when it bought The Streets of Brentwood in 2018.
In 2018, an affiliate of Chicago-based Fairbourne Properties paid about $78.8 million for the shopping center portion of The Streets of Brentwood. Fairbourne, through a different affiliate, paid another $7 million for multiple parcels of empty land adjacent to the shopping center for a total purchase package of $85.8 million.
During the six years that Fairbourne Properties owned the shopping center and the adjacent chunks of land, the real estate firm sold two empty parcels at the site, county documents show.
Fairbourne sold one vacant parcel in 2022 for $1.6 million to an entity operating as Sai Shiva and another empty parcel in 2023 to Sutter Health for $3.6 million, according to deeds on file in Contra Costa County.
Regarding the value of The Streets of Brentwood specifically, CenterCal and Heitman paid 3.7% less this month than what Fairbourne paid in 2018 for the retail center, Contra Costa County real estate documents show.
Even worse, the shopping center’s current price is 14.8% below its $89.1 million property value as of January 2024, according to the Contra Costa County Assessor’s Office.
The new owners believe they can bring plenty of positive changes to The Streets of Brentwood.
“We are committed to creating spaces that not only serve as shopping destinations but as community hubs where people can gather, relax, and enjoy a variety of experiences,” said CenterCal Properties Chief Executive Officer Jean Paul Wardy.
CenterCal and Heitman believe this sort of retail and dining complex can be successful in the wake of the coronavirus outbreak.
“Open-air lifestyle centers have demonstrated strong operating fundamentals post the COVID-19 pandemic,” said Heitman portfolio manager Gordon Black. “These fundamentals are further benefitting from minimal new supply and sustained demand from retailers.”
The new owners hope area residents and the center’s tenants will help shape the property’s future.
“We look forward to working closely with our retail partners and the Brentwood community to continue to elevate this vibrant center,” Wardy said.