Landmark Tri-Cities shopping area sells for first time in over 40 years for +$10M
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- BPG Investments and Startup Development Partners bought Tri-Cities Center for $10.5M.
- New ownership plans facade upgrade and targets higher-tier retail tenants.
- Burlington plans to downsize, creating leasing opportunity near Columbia Center mall.
A prominent but low-key shopping center near Kennewick’s Columbia Center mall has new owners keen to revive its flagging fortunes.
BPG Investments and Bellevue-based Startup Development Partners paid $10.5 million for Tri-Cities Center — a 14.2-acre collection of five retail parcels on the 7300-7500 blocks of West Canal Drive.
The property is anchored by Burlington Coat Factory, Craft Warehouse, Dollar Tree and others.
The sale closed Friday, June 27, the first time the property has changed hands in more than 40 years.
“It needs some love” said Clayton Brown, founder of BPG as well as a broker for Marcus & Millichap.
The corner of West Canal Drive and Columbia Center Boulevard is arguably the top retail corner in the fast-growing Tri-Cities, he said.
The new owners will upgrade the facade to give the complex a unified look. More importantly, it is marketing space to top-drawer tenants, Brown said.
Burlington cuts back
Burlington Coat Factory, which occupies the original Kmart store, presents the new owners with a tantalizing opportunity to remake the corner, according to Brown.
Burlington is reducing store sizes across the nation, including in Kennewick. Brown said the retailer intends to give back the part of the store that overlooks Columbia Center mall to the west, as prime as it gets in retail real estate.
Renderings show a glassy new entrance for an unnamed retailer at that corner.
“We are talking to tenants,” he said without disclosing potential newcomers to the market.
Notably, he said a tenant has been secured for one of the center’s “pad” sites, a building that’s been vacant since David’s Bridal closed amid a 2023 bankruptcy.
Tri-Cities Center initially developed in the 1970s and last sold in 1983 to New York-based Kennewick Associates LTD Partnership, aka Sierra Kennewick LTD. Tenants have changed but the property itself has not been significantly upgraded.
Chick-fil-A and Panera effect
The deal does not include three parcels along North Young Street, but does include the land under Arby’s and Burger King, which both have long-term leases to use the sites.
Brown said he’s done lots of deals across the region and was drawn to the Columbia Center, where opportunities to develop are rare.
Canal Drive is getting a revival of sorts as well, he said, noting the recent debut of Chick-fil-A a few blocks to the east, and the pending opening of Panera Bread at the former Old Country Buffet building.
“It seems to me like Canal and Columbia are getting built out,” Brown said.
Seth Startup, founder of Startup Development, called Tri-Cities Center a great opportunity for an investor.
It sits on prime real estate next to the region’s largest mall — Columbia Center. “We look forward to modernizing the center and creating long-term value for our tenants and partners,” Startup said in a release.
The property’s two primary anchors — Burlington and Dollar Tree — have mid-tier credit ratings, according to 2024 ratings released by Moody’s and Standard & Poor’s, the main credit rating agencies.