Philadelphia retail center with new national grocery tenant sells

PHILADELPHIA, Nov. 18, 2021 – JLL Capital Markets announced today that it has closed the sale of and arranged acquisition financing for Red Lion Plaza, a 236,277-square-foot, grocery-anchored shopping center in a densely populated northeast location in Philadelphia, Pennsylvania.

JLL represented the seller, Finmarc and KPR. Additionally, working on behalf of the new owner, JLL placed the 12-year, fixed-rate, non-recourse loan with a regional bank.

The 97-percent-occupied Red Lion Plaza is home to a strong and diverse tenant lineup that includes a new national grocer tenant, Burlington, Ross Dress for Less, Pep Boys and Planet Fitness. Originally constructed in 1962, Red Lion Plaza recently underwent an expansion in 2021 that added 20,000 square feet of in-line retail pad space occupied by Mattress Firm, Panera Bread, Aspen Dental and Tropical Smoothie Cafe.

Red Lion Plaza is situated on 18.7 acres at 9908-9960 Roosevelt Blvd. (Highway 1) within a hyper-active regional retail corridor due to population density and transportation infrastructure. The center has immediate connectivity and is along Highway 1, which exposes the property to about 90,000 vehicles a day. Additionally, the infill area surrounding the center includes nearly 166,006 residents within a three-mile radius who earn an average annual household income of $82,186.

The JLL Retail Capital Markets team representing the seller was led by Jim Galbally, Chris Munley and Colin Behr.

“The Finmarc and KPR team did an incredible job repositioning Red Lion Plaza,” Galbally said. “With the addition of a national grocer, Ross, Burlington and Panera Bread, Red Lion Plaza is the premier retail asset in Northeast Philadelphia.

“Roosevelt Boulevard is a hyperactive, superregional trade area, and the strength of the market combined with Red Lion’s best-in-class tenant lineup, attracted extremely aggressive capital from across the country, which ultimately drove the process and pricing,” Behr added.

“We continue to witness best-of-the-best pricing metrics for grocery-anchored shopping center trades within the Philadelphia MSA, as the steady migration of new capital providers continues to enter the region,” Munley said. “If demand for the product continues to rapidly increase, we anticipate further cap-rate compression into 2022 given the lack of available inventory.”  

The JLL Capital Markets Debt Advisory team representing the new owner was led by Michael Pagniucci.

“The tenant lineup and infill location at Red Lion Plaza led to very strong lender interest from a diverse list of local and national capital sources,” Pagniucci said. “We were successful in meeting the borrower’s request for a competitive 12-year fixed rate loan. “

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

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