August 15, 2024

CRC Acquires Creekside Station, 126,304 Square Foot Retail Center In Winchester, VA

Also Covered By

BALTIMORE, MD (August 15, 2024) – Continental Realty Corporation (CRC), a Baltimore-based real estate investment and management company active in 11 states with $4 billion Assets Under Management (AUM), has acquired Creekside Station, a 126,304 square foot lifestyle center in Winchester, Virginia for $19.5 million. Located at 3103 Valley Avenue, the asset was approximately 97 percent leased by nearly 50 service-oriented and specialty retailers, plus restaurants, at the time of the transaction. Gilbert Trout of Trout Daniel Associates represented the seller, Creekside Properties, and CRC was self-represented. CRC has now acquired nearly $610 million worth of retail real estate since the beginning of 2021.

Creekside Station was purchased with funds from Continental Realty Opportunistic Retail Fund I, LP (CRORF), a closed-end fund for which $296 million has been raised. Since the inception of CRORF in 2021, CRC has acquired 13 retail properties comprised of approximately 2.8 million square feet of space. Since 2012, CRC has raised nearly $1 billion in equity for retail and multifamily investments across five real estate funds and multiple associated co-investments.

This represents CRC’s second shopping center acquisition in Virginia this year, following the purchase this spring of Gayton Crossing, a 160,830 square foot neighborhood shopping center located in Richmond.

CRC owns and manages a diversified portfolio of more than 9,000 apartment homes, as well as retail centers and other commercial properties consisting of nearly eight million square feet, serving the real estate needs of more than 1,200 tenants across 11 states. CRORF was formed as a vehicle to target and acquire a diversified portfolio of opportunistic and value-add retail properties throughout the United States.

“Winchester is one of the fastest growing metropolitan areas in Virginia, and in Creekside Station we have acquired a nearly stabilized, highly visible and irreplaceable asset with long term upside,” said Josh Dinstein, Senior Vice President, Acquisitions for CRC. “The asset is positioned adjacent to a fully leased commercial office park, less than four miles from Valley Health System, Winchester’s largest employer, and construction is underway on almost 50 new townhomes within walking distance. Creekside Station’s strategic positioning near several major interstates, diverse tenant mix, robust housing and population growth are factors that make it an ideal acquisition to generate value for our investors.”

Curated tenant mix leads to sustained 95 percent occupancy over the past 15 years

Delivered in 2003 and situated at the signalized intersection of VA Route 11 (Valley Avenue) and Battle Park Drive in Frederick County on a 13-acre site, Creekside Station features a curated mix of nearly 50 restaurants and retailers occupying inline spaces among 10 buildings and free-standing pad sites. Representative tenants include Chico’s, J.Jill, Jos. A Bank, IJ Canns American Grille, The Little Gym, and Virginia National Bank. The property is surrounded by a free surface parking lot suitable for 500 vehicles.

Nearly 80,000 people, with an average household income of $103,000, reside within a five-mile radius of Creekside Station, and an additional 105,000 people work within five miles of the shopping center. More than 15,000 vehicles pass the site each day via VA Route 11, and the daily traffic counts at the intersection of Interstate 81 and VA Route 37, less than one mile away, is 75,000 vehicles.

The center is part of Creekside Town Center, a mixed-use community featuring Creekside Village, a 100 percent leased office park containing more than 40,000 square feet of commercial office space. Construction is also underway on The Lofts at Creekside, featuring nearly 50 three-story townhomes and situated within walking distance of the shopping center.

Substantial population increase in Winchester tied to remote work phenomenon

According to the Frederick County Economic Development Authority, more than 120,000 people work within the Frederick County-Winchester trade area, a figure that is expected to increase to more than 132,000 by 2030. The workforce located within a 45-minute drive from Frederick County and drawing from 10 counties in three states totals more than 360,000 people and the current unemployment rate is approximately 2.4 percent.

“The remote work phenomenon that was accelerated by the pandemic has positioned Winchester as an extremely attractive place to work, given the quality-of-life advantages and lower cost of living as compared to suburbs closer to Washington, D.C.,” Dinstein stated. “Winchester and Frederick County remain among the fastest growing sections of the state, as driven by the migration of federal workers who are only required to visit the office occasionally or not at all. This population increase, in turn, has buoyed customer traffic and sales at area shopping venues.”

Winchester’s largest employers include Valley Health System, Trex Decking, Navy Federal Credit Union, Kingspan Insulation, Procter & Gamble, and Amazon.

Planned center improvements designed to maintain value of asset

Several physical plant improvements have been implemented at Creekside Station over the past five years, including replacement of the roof and HVAC systems, repairs to the parking lot, painting, and landscaping upgrades. CRC plans to continue to invest in Creekside Station to upgrade and improve the property.

Summary of CRORF acquisition activity

“Creekside Station, the dominant lifestyle center in the greater Winchester market, with its sustained 95 percent occupancy, has demonstrated extreme resiliency over the past 15 years, which led to our preliminary interest in this asset,” said CRC’s CEO, JM Schapiro. “Its perfect balance of local and national retailers and restaurants, combined with the proven fundamentals of Frederick County’s sustained population growth, new residential construction, and robust labor market, makes Creekside Station an ideal addition to our national portfolio. We intend to quickly fill the few remaining vacancies and implement proven asset management strategies to further improve the value of the asset.

“CRC’s vertically integrated platform, which encompasses all facets of the acquisition process, including cutting-edge data and metrics analysis, continues to yield significant dividends for our investors. This approach enables us to effectively and decisively identify properties, complete due diligence, and add them to our portfolio. CRC remains a preferred and proven counterparty to sellers of retail real estate, given our immediate access to ready capital and our track record of certainty to close.”

CRC purchased two properties last year on behalf of CRORF totaling nearly $190 million and approximately 750,000 square feet of space. This activity included the $78 million acquisition of Lakeside Village, a nearly 460,000 square foot super-regional lifestyle center located just east of Tampa, Florida, and the $110 million purchase of South Coast Collection (SoCo) a 292,000 square foot luxury home furnishing and design lifestyle center in Costa Mesa, California.

Prior to its 2023 entry into southern California, CRC entered the suburban trade areas of Chicago, Illinois and Troy, Michigan in 2021. Key acquisitions included Banks Crossing, a 255,101 square foot regional shopping center in Fayetteville, Georgia; The Shoppes at Webb Gin, a 330,000 square foot lifestyle center in Greater Atlanta; a portfolio of five shopping centers comprising more than 900,000 square feet of space in Cicero, Mount Prospect, Naperville, and Palatine, Illinois; and Oakland Plaza and Oakland Square, shopping centers located in Troy, Michigan consisting of nearly 392,000 combined square feet of space.

CRORF targets neighborhood, grocery-anchored, lifestyle and power centers situated within the U.S.’s top 50 Metropolitan Statistical Areas (MSA), as well as select secondary markets.

Headquartered in Baltimore, Maryland and founded in 1960, Continental Realty Corporation is a full-service commercial real estate and investment company focused on acquiring and operating retail and multifamily properties. The privately held firm owns and manages a diversified portfolio of retail centers consisting of almost eight million square feet of commercial space and over 9,000 apartment homes across 11 states, with a portfolio value exceeding $4 billion. For additional information, visit www.crcrealty.com.