Urban Edge Properties has expanded its retail footprint in Florida with the acquisition of Regency Court, a 140,000-square-foot grocery-anchored shopping center in Boca Raton. The company purchased the property for $90.3 million from Invesco, adding a well-trafficked, necessity-based retail asset to its portfolio. Regency Court is characterized as a premier center in the local market, supported by strong tenant demand and consistent customer activity.
The shopping center is anchored by Publix and Walgreens, two national retailers that draw regular daily traffic. Both anchors are currently paying below-market rents, creating a rent-growth opportunity for Urban Edge over time. The leases for these tenants, including extension options, run for another six years, giving the new owner a defined window to execute on its business plan as lease events approach.
Urban Edge has indicated that it evaluated the deal primarily on the basis of income growth rather than the initial cash yield. The company cited an approximate 4% going-in yield at acquisition, but highlighted the potential for stronger returns through future rent increases. In its most recent quarterly report, Urban Edge projected that the asset is expected to deliver an 8% to 9% unlevered internal rate of return, underscoring the anticipated value creation from repositioning or re-leasing over the hold period.
Market positioning appears to be a key part of the investment thesis. Regency Court is the only grocery-anchored shopping center within a two-mile radius, providing a measure of competitive insulation. The center attracts approximately 3.3 million visitors annually, and management reports that traffic has been trending higher. This combination of limited direct competition and rising visitation levels supports the view that the property can sustain and potentially grow retailer sales, which in turn may justify higher rents over time.
In discussing its broader strategy, Urban Edge signaled that it intends to target additional opportunities in Florida on a selective basis. Management indicated that capital for such acquisitions could be sourced by recycling proceeds from stabilized, high-credit, lower-growth power centers in New Jersey. That approach would effectively shift capital from mature assets into markets and properties with greater perceived upside. The company also noted that it may evaluate other locations across Florida, depending on the merits of individual real estate opportunities, suggesting that this acquisition could be a template for further rotation into the state.
For Invesco, the transaction marks the sale of a high-traffic, grocery-anchored center into an active buyer focused on long-term rent growth. For Urban Edge, the purchase of Regency Court represents a bet on both the strength of the Boca Raton retail market and the enduring draw of necessity-based anchors such as Publix and Walgreens, supported by favorable local supply dynamics and growing shopper traffic.
