ShopOne JV Acquires Retail Center in Rhode Island – What is a Ground Lease?
A joint venture partnership between ShopOne Centers REIT Inc., private markets specialist Pantheon and an undisclosed global institutional investor has acquired North Providence Marketplace, a 112,497-square-foot grocery-anchored shopping center in North Providence, R.I.
Just 2 miles north of downtown Providence, the center is anchored by a Shaw’s Supermarket and is 88 percent occupied. Other tenants include Starbucks (inside Shaw’s), Dollar Tree, Rainbow, H&R Block and Sally Beauty Supply.
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About 180,000 residents are within 3 miles of the property and have an average household income of about $79,000. In addition, North Providence Marketplace is less than five minutes from Providence College and Rhode Island College, which between them have more than 12,000 students.
In a prepared statement, Chris Reed, chief investment officer at ShopOne, referenced the center’s having served the area for more than five decades, adding that the company plans to invest additional capital at the property to add retail uses that will complement its existing merchandising mix.
Slow to no growth
The metro Providence retail real estate market has experienced varying quantities of net absorption recently, from nearly 400,000 square feet in the third quarter of last year down to a negative 33,000 square feet in the second quarter of this year, according to a report from Cushman & Wakefield. That’s against an inventory of about 33.4 million square feet, with essentially no new space delivered or underway this year.
Overall retail vacancy has generally been roughly on par with, or slightly higher than, the average for all markets in the Northeast. Asking rents in the second quarter averaged $20.04, Cushman & Wakefield reported.
The acquisition of North Providence Marketplace was the joint venture’s second purchase of a grocery-anchored shopping center in New England. In May, the partners acquired Heritage Park Plaza in a suburb of Springfield, Mass., for $28.3 million.
North Providence Marketplace is the joint venture’s second recent purchase in New England.
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In the simplest form, a ground lease is a long-term net lease (usually 49 years or 99 years) of land including any improvements on the said land. Assets that can be subject to a ground lease include but are not limited to, vacant land, office buildings, and large residential buildings.
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