The Plant in San Jose lands major buyer
$175M deal shows investors still believe in physical stores
SAN JOSE >> A high-profile San Jose retail and restaurant center has been bought by a real estate firm in a deal that shows big investors still hunger for physical stores in the wake of the coronavirus pandemic.
The Plant, located near downtown San Jose at the corner of Curtner Avenue and Monterey Road, has been bought by The Necessity Retail REIT. The real estate firm bought the South Bay retail complex as part of a $1.3 billion purchase of a package of commercial properties.
Necessity Retail paid $175 million for The Plant, the real estate firm said Tuesday.
“The Plant is a highly desirable asset in the portfolio of open-air shopping centers we have acquired in 2022,” Michael Weil, chief executive officer of Necessity Retail, said in a prepared release.
Located at 1 Curtner Ave., The Plant totals 650,500 square feet, according to a leasing brochure circulated by brokers James Chung and Marisa Delgado with The Econic Co., a commercial real estate firm that is seeking tenants for the complex.
“I'm bullish on the opportunities for a center like this, said Chung, founder and principal executive with Econic Co.
The Plant was built through the redevelopment of a long-time General Electric
factory at the site. Some of the old GE structures were retained in the development project.
“There is a lot of tenant interest in The Plant,” Chung said. “This is a great asset.”
The Plant Bistro restaurant recently signed a lease for one space, Chung said. Restaurants are negotiating leases for two more spaces in The Plant.
“The Plant has a great location,” said David Taxin, a partner with Meacham Oppenheimer, a commercial real estate firm. “With a new owner, it's going to be all about getting the vacancies leased up.”
Target, Home Depot, Best Buy, Famous Dave's, Panera Bread, Applebee's Grill + Bar, Ross Dress for Less and Ulta Beauty are among the merchants that lease space in The Plant.
“When you have Target, Home Depot and Best Buy as your anchors, you can have some confidence you can lease the vacant
spaces,” Taxin said.
Necessity Retail is gambling that it can be successful in owning retail and restaurant complexes whose anchors include big-box retailers, despite the economic uncertainties unleashed by the coronavirus, along with the shift to online shopping.
“Our properties are located in strong suburban communities and are the brick and mortar locations that represent the last mile in retail, the places consumers continue to visit every day to receive goods and services,” Necessity Retail said on its website. “We are witnessing
a retail renaissance.”
The Plant is poised to participate in this upswing, in the view of Silicon Valley brokers.
“More investors and tenants are looking in the market for these kinds of power centers,” Chung said.
Among the empty spaces
are sites that formerly were leased to Toys `R Us, a nowdefunct toy retailer, and OfficeMax. Yet even these are drawing interest.
“We are even seeing offers on the big-box spaces that are empty,” Chung said. “There definitely is an opportunity here.”