Changing Hands
The Wilder Companies, in a joint venture with O’Connor Capital Partners, has acquired one of the most desirable retail portfolios in New England.
Katie Foxworth Lee

Village  Shoppes, one of the 10 centers in Wilder’s newly acquired portfolio, is a 282,800-square-foot lifestyle center in Canton, Massachusetts. Anchors include Shaw’s, Marshalls, Talbots, Ann Taylor Loft, EMS and Gap.

The Wilder Companies is changing the landscape of retail real estate — this time, however, not just through a new Loop development but through a major portfolio acquisition. Changing hands are 10 retail centers in New England to the tune of $500 million, in a highly anticipated deal closed by Wilder and joint venture partner O’Connor Capital Partners on May 4, 2007. The seller was The Flatley Company, who was represented by Cushman & Wakefield of Massachusetts in the deal.

The complete portfolio spans 2.3 million square feet, ranging from regional centers to lifestyle and grocery-anchored centers throughout Massachusetts and New Hampshire. The centers boast an average occupancy level of 98 percent and are anchored by some of the top-performing retail tenants in the market, such as Talbots, Gap, Wal-Mart, Shaw’s, T.J. Maxx, The Home Depot, Staples and Borders.

“These are well located, thriving assets,” says David J. Mallen, a principal with The Wilder Companies. “Tom Flatley and his team have done an excellent job building one of the most desirable retail portfolios in New England.”

Pictured here is Talbots at Village Shoppes in Canton, Massachusetts. All of the existing centers in the Flatley portfolio were recently renovated, redeveloped or expanded prior to The Wilder Companies purchasing them.

The newly acquired portfolio consists of seven existing centers — all recently redeveloped, renovated or expanded — and three centers under development. The existing centers in Massachusetts include Dedham Mall, a 506,700-square-foot center in Dedham; Medfield Shops, an 87,700-square-foot Shaw’s-anchored grocery center in Medfield; Village Shoppes, a 282,800-square-foot center in Canton; Falmouth Mall, a 273,100-square-foot Wal-Mart-anchored center in Falmouth; and Southwind Plaza, a 215,000-square-foot Home Depot-anchored center in Hyannis. In New Hampshire, the existing centers include Royal Ridge Center, a 220,100-square-foot center in Nashua; and Belknap Mall, a 218,500-square-foot Shaw’s-anchored grocery center in Belmont/Laconia. The portfolio also includes three New Hampshire properties currently under construction: Portsmouth Circle, a 164,400-square-foot Home Depot-anchored project opening this summer in Portsmouth; Rochester Shoppes, a 304,500-square-foot Lowe’s-anchored development opening fall 2008 in Rochester; and Rochester Shoppes East, a 27,600-square-foot Staples-anchored ancillary center opening spring 2009, also in Rochester.

Andrew T. LaGrega, principal, The Wilder Companies.

allen’s colleague Andrew T. LaGrega, also a principal with The Wilder Companies, says that in addition to a great location, the centers boast excellent anchor stores and merchandise mixes. “Centers like these are very hard to come by today, especially in New England where the barriers to entry are substantial,” LaGrega says.

Acquisition financing was provided by Ireland-based Anglo Irish Bank, which in North America has representative offices in Boston, New York and Chicago. “We and our partners at O’Connor Capital Partners have a great relationship with Anglo Irish,” LaGrega says. “We have worked on deals with the guys in the Boston Anglo office — and, in fact, have shared a pint or three on a few occasions!”

Wilder Companies’ joint venture partner, New York-based O’Connor Capital Partners, has also worked with the team before, having served as Wilder’s capital partner on several deals. “We have a great working relationship and similar philosophies when it comes to retail real estate,” LaGrega says of O’Connor Capital. “We look forward to doing many more deals with them in the future.”

As for the future of this portfolio, The Wilder Companies and O’Connor Capital Partners plan to make the centers more pedestrian-friendly, bring in more restaurants, add more lifestyle tenants and “truly create a better sense of place,” LaGrega says.

“Although the Flatley organization did a phenomenal job in developing and merchandising these centers, we bring a new eye and, in some cases, a new philosophy to this great portfolio,” LaGrega says. “We are truly merchandise mix driven and will even sacrifice rent to put together the right balance of tenants.”

Falmouth Mall, a 273,100-square-foot center in Falmouth, Massachusetts, is another property acquired by The Wilder Companies in the $500 million transaction. The seller was The Flatley Company.

According to LaGrega, several new tenants have been signed and the company is in the process of finalizing several more leases since returning from the ICSC Spring Convention 2 months ago in Las Vegas. Many specialty anchors, restaurants and retailers were eager to talk to The Wilder Companies regarding the portfolio at ICSC.

“We think today that restaurants — quick-casual and better sit-down venues — are an important part of every center,” LaGrega adds. “Not to overuse clichés, but we merchandise to today’s busy lifestyles. Customers want fair value, convenience and leisure. Our goal is to deliver that to them.”

With the changing of the guard from The Flatley Company to The Wilder Companies, Wilder plans to continue Flatley’s legacy of great tenants and center improvements by redeveloping and possibly expanding the existing portfolio. With each change, all three company principals — LaGrega, Mallen and Thomas Wilder — will be personally involved in every center and major decision. The Wilder Companies also brought on board several former Flatley Company executives to help grow the portfolio and grow the company. Adds LaGrega: “As my partner Dave Mallen always says, ‘The only thing constant in retail is change.’”