By Meghan Hall
Last year, many speculated about the future of retail: how it would fair, whether or not retail properties would survive, and just how viable of an investment they would be amidst the rise of e-commerce. However, the recent sale of the Redmond Town Center points to healthy interest in high-quality retail and mixed-use assets. In a transaction that closed just yesterday, DRA Advisors sold the Redmond Town Center—which totals 693,000 square feet—to Chicago-based Fairbourne Properties LLC. The property sold for $192,032,040, according to public documents, or about $277 per square foot.
The Redmond Town Center is comprised of a two-level, 395,000 square foot, open-air mixed-use center, an additional two-level, 111,000 square foot department store that will be repositioned for office and retail uses, an additional 152,000 square foot community center, and a 34,000 square foot retail strip center.
The sale occurred in three transactions: The former Macy’s building and surrounding parking lot sold for $30 million, while additional parking and the strip mall portion including shops such as Bed, Bath & Beyond sold for $17 million, according to parcel data and public documents. The remainder of the center, which includes most of the Redmond Town Center itself, sold for $145,032,040.
DRA Advisors acquired the retail portion of the property from Macerich in 2013 for $127 million. The same year, the office portion—leased to Microsoft and AT&T—sold for $185 million to Shorenstein Properties.
In addition, the property boasts strong retail demographics, based on a brochure produced by Eastdil Secured. Surrounding the Redmond Town Center there is a population of nearly 235,000, and the average household earns $169,000 annually. The population is expected to grow even more in the future, by almost eight percent between 2019 and 2024.
The retail center is less than 10 minutes to Microsoft’s 500-acre campus and will soon have a light rail stop of its own. It is located in the heart of a 2.2 million square foot urban village, part of the Redmond Town Center master-planned development, which also includes a 610,000 square foot office leased to Microsoft and AT&T, and four hotels, ranging between 160 and 286 keys.
According to Fairbourne Properties’ website, the firm was established in 2016 and has since had nearly $1.3 billion total assets under management. It owns 16 properties, totaling nearly 5 million square feet. Its website indicates that Fairbourne’s acquisition of the Redmond Town Center is its first foray into the Puget Sound market.