WESTWOOD, N.J. — Westwood Plaza, the shopping center whose vacant former Kmart building has been the focus of redevelopment discussion since the retailer’s 2023 closure, is under contract to be sold for $28.8 million.
According to a filing with the U.S. Securities and Exchange Commission, Hackensack-based First Real Estate Investment Trust of New Jersey entered into a purchase and sale agreement May 26 with an affiliate of Regency Centers Corporation for the shopping center at 700 Broadway.
The agreement calls for the sale of 100% of the trust’s ownership interest in Westwood Plaza, subject to due diligence and other closing conditions.
The filing says the buyer deposited $1.2 million into escrow upon signing the agreement. That deposit remains refundable during a 120-day due diligence period ending Sept. 23, 2026.
If the purchaser elects to move forward after that period, it must place an additional $1 million into escrow. The agreement also allows the buyer to extend due diligence for up to nine additional months, paying the seller $50,000 per month for each month of extension.
The filing says there is no financing contingency in the agreement. Either party may terminate the agreement if the transaction has not closed by Aug. 15, 2027.
The trust’s board of directors unanimously approved the transaction, according to the filing. The report was signed by Robert S. Hekemian Jr., president and chief executive officer of First Real Estate Investment Trust of New Jersey.
Regency Centers describes itself as a national owner, operator and developer of suburban shopping centers, with a portfolio that includes properties anchored by grocers, restaurants, service providers and retailers. The company says it operates as a fully integrated real estate company and is a self-administered, self-managed real estate investment trust and member of the S&P 500 Index.
The proposed sale comes amid continuing interest in the future of the former Kmart space, vacant since the retailer closed its Westwood store in September 2023. At the time, the store was the last remaining Kmart in New Jersey.
Mayor Ray Arroyo told Pascack Press on May 31 neither the buyer nor seller reached out to the borough prior to the release of the public filing announcement.
“The property remains zoned for a shopping center. Currently, that is the only permitted use. No one has asked us to consider any plan that might require a rezoning,” Arroyo said.
He added, “We did get an inquiry earlier in the month from an engineering firm requesting information on the site’s existing infrastructure. I’ve asked the borough attorney to contact Regency directly and inquire as to their intentions. A revitalized shopping center with updated flood control measures would be most welcome.”
According to a leasing plan published by Hekemian & Co., the former Kmart building is being marketed as an 84,254-square-foot space that can be subdivided for multiple tenants. The plan also identifies several smaller vacant storefronts throughout the shopping center.
As Pascack Press reported in February 2024, the Borough Council amended zoning for shopping centers to permit a range of indoor recreational uses, including instructional sports facilities, tennis, squash, handball and racquetball courts, skating rinks, bowling alleys, golf driving ranges, gymnastics facilities, and similar activities operating entirely within enclosed buildings.
Mayor Raymond Arroyo told Pascack Press then that the added uses were intended to draw “more active consumers and families to the plaza” who might also spend time in the Central Business District.
Arroyo said the zoning would include pickleball under the ordinance’s provision for “similar recreational uses.” He said the shopping center zone “should complement rather than undercut what is available for consumers in the downtown.”
The February 2024 report also noted that Hekemian & Co. had received NJDEP approval to add 26,000 square feet of potential retail space at the plaza, a development Arroyo said had come as a surprise given worsening flood conditions and higher NJDEP flood elevations along Pascack Brook.
The new SEC filing does not discuss redevelopment plans for the property, prospective tenants, or changes to existing operations. It also does not indicate whether the purchaser intends to pursue any of the recreational uses permitted under the borough’s amended zoning regulations.
