Bart Blatstein Buys Back South Philly Retail Plaza From Dissolving REIT
Attempts to develop dense residential properties on the Delaware River waterfront in South Philadelphia have fallen apart.
Tower Investments has purchased the Riverview Plaza shopping center on Christopher Columbus Boulevard from Cedar Realty Trust nearly 20 years after Cedar originally purchased the property from Tower, the Philadelphia Business Journal reports. Tower, owned by Bart Blatstein, sold the 236K SF center along with the nearby 142K SF Columbus Crossing center for a combined $75M in 2003, and it bought Riverview Plaza back for $34M.
Cedar revealed plans in early 2019 to redevelop Riverview Plaza into a mixed-use complex with more than 250 apartments, 100K SF-plus of additional retail and nearly 10K SF of office space, but never progressed past the planning phase. During the pandemic, the 17-screen, 77K SF United Artists movie theater anchoring the center shuttered, leaving a 22K SF Pep Boys and an 18K SF Staples as the two largest remaining tenants, as well as a 50% vacancy rate, PBJ reports.
“They had this grand idea of creating a residential community there and what they did is let it go to pot,” Blatstein told PBJ.
A similar story played out a couple of miles to the west at a shopping center on Oregon Avenue, where Cedar had planned to build hundreds of apartments in turning a neighborhood center called Quartermaster Plaza into a dense, mixed-use community — plans that also came to naught.
An underperforming portfolio was among the issues that led Cedar Realty Trust to agree to sell 33 of its centers to a joint venture of KPR Centers and a fund run by DRA Advisors for $840M. It sold the rest of its assets and operations to Wheeler Real Estate Investment Trust earlier this year for $291M. Riverview Plaza was held back from the sale; details about which transaction will include Quartermaster Plaza have yet to be disclosed.
Mismanagement by Cedar may not have been the full story for Riverview, where Blatstein plans to invest $10M in upgrades to lease the center back up, PBJ reports. Within a three-block radius, multiple vacant development sites have suffered through multiple scuttled or indefinitely delayed plans, all of which have included hundreds of apartments. The only development in the immediate area to actually move forward is a separate shopping center anchored by a Giant grocery store developed by Blatstein.
Blatstein has refocused on retail after selling off its larger-scale, mixed-use development sites over the past couple of years.
A 10-building multifamily project on the opposite side of Columbus Boulevard with a sizable retail component was proposed by an entity called K4 Associates in 2017, bolstered by a proposed zoning overlay from Councilmember Mark Squilla. The man behind K4 wound up adding the site to his pattern of uncompleted developments.
National Realty Investment Advisors controls a site across Columbus Boulevard from Riverview Plaza and across Reed Street from Blatstein's newer project. Since 2017, NRIA has planned a three-building multifamily development called the Philadelphia Water Club. Planning progress had been made for years before NRIA allegedly pulled the plug just as development partner U.S. Construction was readying the start of construction. USC is suing NRIA in federal court for breach of contract over the project.
