Regency Centers Corporation REG recently announced the acquisition of two adjacent properties in Long Island, NY. The off-market buyout helps the company boost its portfolio with a property that enjoys an experienced tenant roster.
The acquired properties — 33,000-square foot center anchored by Petco (Hewlett I) and the 20,000-square foot center anchored by Duane Reade (Hewlett II) — were separately operated. However, Regency’s acquisition will make these properties operational as a single center known as Hewlett Crossing.
Advantageously located on the major retail corridor, Hewlett Crossing has premier demographics. In fact, around 70% of the tenants have been occupying space at the center for 15 years or above. Moreover, since 1955, the Hewlett Fish Market has been a tenant. Notably, the dense and wealthy population base helped the property experience such a seasoned tenant roster and raises our hopes for the continuation of robust footfall at this property over the long term.
With this buyout, Regency fortified its presence in the Long Island to 14 centers, aggregating around 1.9 million-square feet of space.
Over the past several quarters, a number of issues have cropped up in the retail REIT market, with consumers preferring online platforms over in-store purchases, resulting in store closures and bankruptcies. These have affected the share price of several major retail REITs, including The Macerich Company MAC, Taubman Centers TCO and Kimco Realty Corporation KIM.
Amid these, Regency’s focus on flourishing properties with highly productive grocers, restaurants, service providers, and best-in-class retailers seems a strategic fit. Its centers are usually necessity driven and steer a dependable traffic.
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