Baltimore-based Continental Realty Corp. has purchased a Hagerstown shopping center for $23.5 million.
The company bought the Centre at Hagerstown at 17850 Garland Groh Boulevard. The 331,000-square-foot property was 93% leased at the time of the sale. Anchor tenants include Dick’s Sporting Goods, Marshalls and Bed Bath & Beyond.
“We were drawn to the opportunity to acquire a preeminent shopping center that serves the Hagerstown community. We purchased the property below replacement cost, and we’ll have the ability to add significant value to it with the execution of our business plan,” Paul Kang, vice president of acquisitions, Continental Realty Corp. said in a statement.
Located at the intersection of Interstate 81 and Route 40, the site has 40 pads visible from the highway. Eateries including IHOP. Panera Bread and McDonald’s are the major tenants in those buildings.
The Centre at Hagerstown is also near another shopping center with a Home Depot and Walmart Supercenter.
More than 54,000 people, according to Continental Realty Corp., live within a three-mile radius of the shopping center. Households in the area have an average income of more than $60,000. Roughly 62,000 vehicles pass the shopping center daily via Interstate 81, and the firm estimates the population with a three-mile radius grows by 30,000 people in the daytime.
The Centre at Hagerstown marks the fifth property Continental acquired via its Continental Realty Fund V. That fund, according to the company, is backed by $210 million and is used to acquire value-add retail and multifamily properties in the mid-Atlantic and Southeast. The purchase of the Centre at Hagerstown marks the fund’s fourth retail acquisition.
Major brick and mortar retailers have struggled in recent years due to the rise of online shopping diverting customers from physical stores. That’s been especially true in older enclosed-style mall developments, such as Baltimore’s Harborplace, which is now in receivership.
But suburban shopping centers, particularly with access to highways, have found success with a heavy mix of so-called “fast casual” restaurants.
Suburban retail centers have also found value in leasing to so-called “doc-in-a-box” urgent care facilities and to “experiential” tenants like iFly Indoor Skydiving.