Brentwood Shopping Center is up for sale, but is it a target for developers?
A D.C. shopping center is for sale, and its location atop a Red Line Metrorail station could make it a candidate for a major mixed-use development in the future.
Brentwood Shopping Center occupies nearly seven acres at the intersection of Brentwood Road and Rhode Island Avenue in Northeast Washington. It features 57,529 square feet of stores, including TJ Maxx, Foot Locker, Radio Shack and CitiBank. The center is part of a larger shopping complex, Rhode Island Place, that is under separate ownership but also includes the city’s only Home Depot and a Giant grocery store.
Seven years ago, after the Home Depot and Giant were already in place, Wal-Mart strongly considered opening its first D.C. store at the center, but later pulled out and opted to wait until last year to try to open at other sites in the city.
Today Brentwood Shopping Center is 100 percent leased and on the market for an asking price of $23.5 million. Its owner, a private company that registered ownership as Brentwood RI LLC, collects $1.5 million annually in rent, according to the marketing materials released by the company’s brokerage firm, Marcus & Millichap. Tenants are paying between $12.50 and $44.85 per square foot; most pay $37.
David Feldman, regional manager in Marcus & Millichap’s Bethesda office, said he expects the plaza to attract buyers interested in holding the property long-term. Many of the leases have multiple options that could extend those deals more than 10 years out.
“We feel that the buyer for this asset is going to be someone looking for trophy real estate, and not someone that is necessarily looking for a redevelopment play,” he said.
Although construction of the center was only completed in 2006, the evolution of urban real estate development toward a focus on mixed uses makes the center already appear out of date to some, particularly because it was designed to accommodate drivers rather than riders from the Rhode Island Avenue-Brentwood Metrorail station nearby.
Brentwood’s shops are arranged in a strip mall with 1,090 surface parking spaces that they share with the Home Depot and Giant. That is in contrast to one of the city’s newer shopping centers, the Target-anchored DC-USA complex on 14th Street NW, which has an underground parking garage that is owned and operated by the city but is rarely full.
Rick Walker, one of the developers of Brentwood Shopping Center, is now focused on building a Wal-Mart-anchored shopping center on New York Avenue NE. He has emphasized to community groups that his new development would create a more walkable, pedestrian-friendly experience than the Rhode Island Avenue offerings provide.
Some transformation of the area is already taking place. A pair of other developers, Bethesda-based Urban Atlantic and Baltimore-based A&R Development, is currently constructing a more walkable, mixed-use project, Rhode Island Row, next door to the Brentwood Shopping Center. When it is completed later this year, it will feature 274 apartments and 70,000 square feet of new retail space. The project received $7.2 million in subsidies from the city.
Any company that buys the shopping center with an intent to develop it will have to negotiate terms with the existing tenants, said Bill Miller, director of retail leasing for Transwestern Retail. Mixed use plans would likely mean the construction of another parking deck, he said, something many retailers dislike because it considered less safe for shoppers.
“That would be the only way to do it,” Miller said. Otherwise, he added, “there’s nothing you can do with the property until the leases run out.”