Costa Mesa-based Donahue Schriber Realty Group, one of the largest shopping center owners on the West Coast, is reported to be nearing a sale in a deal likely to top $3 billion.
Fellow shopping center investor and operator First Washington Realty Inc. of Bethesda, Md., is said to be close to completing a deal to buy privately held real estate investment trust Donahue Schriber, which owns 49 properties totaling around 9.3 million square feet, according to its website.
A majority of Donahue Schriber’s properties are grocery-owned centers, and its portfolio includes five properties in Orange County totaling more than 700,000 square feet.
Notable centers here include the Fountain Valley Promenade on Brookhurst Street, and the Aliso Pacific Plaza on Aliso Creek Road.
The deal with First Washington could close in a matter of weeks, though it’s not 100% certain the transaction will be finalized, according to a report earlier this month by Bloomberg.
First Washington’s financial partner in the acquisition would be the California Public Employees’ Retirement System, according to Bloomberg, which cited anonymous sources with knowledge of the deal.
Retail industry executives familiar with the Costa Mesa company confirmed to the Business Journal last week that a sale was being considered, though a specific price being paid for Donahue Schriber’s assets were not known.
A deal in the reported $3 billion range would value Donahue Schriber’s assets at around $325 per square foot, based on what the company’s website indicates is the square footage of its current assets.
Donahue Schriber representatives could not be reached for comment on the potential sale.
Recent Changes
Donahue Schriber, with retail properties running from San Diego to the Seattle area, has kept a relatively low corporate profile the past several years; its last reported acquisition was in 2019.
In October 2020, the company announced the hiring of prominent retail center executive Michael Glimcher as its new president and CEO.
Glimcher previously was CEO of Chicago-based Starwood Retail Partners. Before that he was CEO of Glimcher Realty Trust.
He took over the CEO role from Patrick Donahue, who retired after spending 41 years with the firm.
Patrick Donahue is the son of company co-founder Dan Donahue, who died in 2002.
Fellow co-founder Tom Schriber retired in 2010.
Smaller Footprint
Most recently, the company’s been in the headlines as a seller of assets.
Late last year, Donahue Schriber sold the largest property in its portfolio, the sprawling Countryside Marketplace in the Inland Empire city of Menifee.
The nearly 722,000-square-foot center that runs alongside the 215 freeway in Riverside County sold for $121.2 million, or about $168 per square foot.
Around the same time, it also sold off a 216,320-square-foot community center in Sacramento, for an undisclosed price.
At the time of Glimcher’s hiring, the REIT reported owning and operating 60 neighborhood, community, and power shopping centers totaling more than 11 million square feet of retail space with over 1,700 tenants.
The value of those properties was estimated around $3.5 billion at the time.
JPMorgan Chase and the New York State Teachers’ Retirement System are said to be Donahue Schriber’s largest investors.
Familiar Investor
First Washington said it owns 105 shopping centers with a value of over $5.6 billion.
Its website shows the company operating two spots in OC, the 353,000-square-foot Brea Marketplace, which is on the opposite side of Birch Street as the Brea Mall, and the 42,000-square-foot Laguna Niguel Plaza.
The company’s been on an acquisition push of late. Last year’s slate of acquisitions included the Torrey Hills Center in San Diego County, which is a couple miles from one of Donahue Schriber’s most valuable properties, the Del Mar Highlands Town Center, which runs nearly 400,000 square feet.
