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PHOENIX-The Camel Central Strip Center has traded to a La Mesa, CA couple, which paid $1.7 million to Santa Ana, CA-based Red Mountain Retail Group for the 14,215-sf, unanchored center along West Camelback Road.
H. Brian and E. Judy Shear bought the 22 W. Camelback Rd. development in a 1031 Exchange, using capital from several residential condos in the Golden State for their first purchase in Arizona. "The Shears are typical Southern California exchange buyers who come to Phoenix looking for a better return," says Steve Julius, a strip center retail specialist with Marcus & Millichap, who represented the seller. Iwan Seto of Century 21 Arizona Foothills represented the Shears.
Julius tells GlobeSt.com that the Camel Central center received 28 offers and traded for below an 8% cap rate. "We had several list price offers," he says.
Built in 1977, Camel Central is situated in a very dense infill site with very high traffic. "It has all the fundamentals of good real estate, especially for retail," Julius says. The center is 93% occupied by local tenants like the Prime Chinese Restaurant and Four Kings Sports Bar. The seller offered a one-year rent guarantee on the center's one vacant space, he says.
According to Julius, the couple plans to do a bit of remodeling to add value to the center. "They have high hopes for the center because the new light rail will have a station right across the street," he explains. "And, the rents are below market at $10 per sf." Julius did a rent survey and found that rents in the area average $12 per sf triple net. The Shears obtained a variable-rate loan from Washington Mutual for 75% of the center's value with a 25-year amortization, according to Julius.
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