With some analysts declaring a retail renaissance for suburban strip malls, an outdoor shopping center in San Mateo, California, is the latest of a slew of such properties to change hands in recent months.
In a joint venture, New York-based Cohen & Steers and West Palm Beach, Florida-based Sterling Organization have paid $127 million for the Bridgepointe Shopping Center, a 24-acre outdoor mall along the thoroughfare of Highway 92, announced JLL, which represented seller Nuveen in the deal.
The mall, originally developed in 1998, is 100% leased, with tenants such as Ross Dress for Less, Marshalls, Nordstrom Rack, Total Wine & More, Chick-fil-A, Five Below and the Container Store. The mall is also near a Target and a Home Depot, that function as “shadow anchors” bringing in customers, said JLL in a press release.
Cohen & Steers has undertaken a flurry of acquisitions of open-air shopping centers for its private real estate clients in recent months, as the investment management firm believes pricing has bottomed in the retail sector. The firm completed seven shopping center purchases through various joint ventures in 2024, including the Bridgepointe deal.
A combination of low levels of new supply and renewed demand for stores from reinvigorated businesses has turned these modest shopping centers into the most highly occupied of any major commercial property type in the United States, according to a Cohen & Steers report from September.
“Values of open-air, necessity-driven shopping centers have bottomed while supply of new retail construction has slowed dramatically; a reality that most investors have yet to fully recognize,” a Cohen & Steers spokesperson said in an email sent previously to CoStar News.
At least $10 billion worth of U.S. open-air retail portfolios are expected to change hands in 2025, according to CBRE. Retailers "are now looking to smaller-format open-air suburban centers for expansion," wrote the firm in a report.
The properties purchased by Cohen & Steers have an average vacancy rate of less than 2%, according to CoStar data. Market asking rents are at an all-time high of $29.48 per square foot, and the average market sale price is at $231 per square foot, another all-time high.
The outdoor malls purchased by the firm include Springfield Commons in Virginia, in a suburb about 15 miles west of Washington, D.C., that’s near the most visited Home Depot in the state. The Walk at Highwoods is about 20 miles northeast of downtown Tampa, Florida, and the Village on Pooler Parkway is in the Savannah, Georgia market.
“Strong performing big box retail with high-quality national credit tenancy continues to demand robust interest from investors across the West Coast,” said Daniel Tyner, a managing director at JLL, in a statement.
