Real estate investment and development firm Lane Partners purchased the downtown San Mateo home of Draeger’s, but a representative from the family grocer said the store will remain.
James Draeger confirmed Monday, Oct. 14, his company received “a very attractive, unsolicited offer,” from the Menlo Park firm to acquire the store’s building at 222 E. Fourth Ave., on the corner of South B Street.
While declining to disclose terms of the deal, Draeger said in an email the company received a leaseback arrangement as part of the deal which will allow the store to keep its doors open for the foreseeable future.
“We have a multi-year leaseback that will ensure our continued operation in San Mateo. We see this as a win-win for our family and our company. This is simply a change in ownership of the real estate, and it is business as usual in San Mateo,” he said.
Lane Partners declined comment on the deal, deferring instead to the statement from Draeger.
Locally, the real estate company is responsible for redeveloping the former Powerhouse Gym in downtown Redwood City into the headquarters for the Chan Zuckerberg Initiative, which is slated to open in early 2020.
It also proposed to build a 17,027-square-foot, mixed-use building which would provide more than 3,500 square feet of ground-floor retail and office space in the basement, second and third floors at the intersection of East Third and South Ellsworth avenues at the former Aaron Brothers store in San Mateo.
As well, Lane Partners expressed interest in constructing an almost 2-million-square-foot office and retail project across 25 acres of industrial land near the intersection of Huntington Avenue and South Maple Avenue at the southern tip of South San Francisco.
San Mateo Mayor Diane Papan noted the importance of a local grocery store’s presence downtown and wished that Draeger’s remains in business at the prominent location.
“The immediacy of a grocer there is going to be really important,” she said, while adding “I’m certainly hopeful that [Draeger’s] will have a certain amount of longevity.”
The acquisition deal, for which escrow closed Tuesday, Oct. 1, comes months after San Mateo officials approved a plan to rebuild the former Trag’s Market at 303 Baldwin Ave., into a four- and five-story mixed-use building.
The Draeger’s line of markets was launched in San Francisco in 1925, before opening its first Peninsula location in San Mateo in 1949. The site was sold in 1964, after another Menlo Park location was opened in 1955, where it remains in operation.
After expanding to Los Altos, the company returned to San Mateo in 1997 to open its downtown location. Considered the company’s flagship, according to the Draeger’s website, the 60,000-square-foot site includes a market, deli, bakery, cooking school, restaurant and additional amenities. Draeger’s opened its first East Bay location in Danville in 2007.
For his part, despite the property sale, Draeger said the company looks forward to continue serving local shoppers.
“We thank our customers and the city of San Mateo for their continued support as we enter our 22nd year as part of that community,” he said.
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