The 98,004-sf project, known as Hawthorne Plaza, stands at 12620-12770 Hawthorne Blvd. It was acquired by the private Barros Family Trust.
The trust was represented in the transaction by Carlos Diaz and Joseph Miller of CB Richard Ellis' Anaheim office. The seller, California partnership Hawthorne Plaza LLC, was represented by Dean Curci of CapRate Properties.
The overall number of retail-property sales in the South Bay and most other parts of Southern California has dropped sharply this year, brokers say, in part because investors are worried about the steady decline in consumer spending. Overbuilding is a concern, too: Marcus & Millichap Real Estate Investment Brokerage Co. recently reported that about 8.7 million sf of new retail space is expected to be completed in LA County this year, and that work began more recently on another 6.9 million sf.
The flurry of new construction should push retail vacancies in the county to 6% next year compared to 5% now, Marcus & Millichap says. The forecast also says overall rents will stay flat, at around $1.79 psf a month.
However, supermarket-anchored properties are one of the relatively few bright spots in LA's retail-property sector, some local experts say.
Though the number of visitors to many regional malls and other types of shopping centers has fallen this year, "traffic at projects with large supermarkets has held up well because consumers still need to buy groceries even when there's a recession," Gerald L. Katell, president of LA-based Katell Properties LLC, tells GlobeSt.com. "You can always cut back on your discretionary spending, but you're still going to need milk and eggs."
Katell, whose company has built more than 5 million sf of retail and office space since it was founded in 1976, says there's another reason why investors are favoring supermarket-anchored properties: They know that "when someone visits a supermarket in a retail center, there's a good chance that same shopper will also drop into a retailer that's located next door or across the same parking lot." Because many shopping center owners base their rent on each tenants' gross receipts, Katell explains, even the smallest of sales by other retailers in a grocery-anchored center can eventually combine to fatten a center's bottom-line profit.
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