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PHOENIX-In one fell swoop, a Los Angeles-based group has made its first retail investment and first purchase in the Valley, paying $3.8 million for the small shop space at South Mountain Plaza. Seller Lawrence & Geyser Development of Tempe will retain ownership of the anchor space, which houses a Big Lots.

Akahi Investments bought the inline space to a 108,700-sf center at 5 W. Baseline Rd. as part of a 1031 exchange sale of a multifamily property in Dallas, says Greg Abbott of local firm DeRito Partners Inc. "Akahi bought 43,230 sf of the center in an off-market transaction," he tells GlobeSt.com. Lawrence & Geyser Development acquired the center in the late 1990s when Abbott sold it to them.

According to Abbott, Akahi's space is 92% occupied. "There's upside with lease-up and by increasing rental rates," he adds. The small shop space is leasing for $11 per sf, but some pacts are gross rather than triple net, he explains. The new owner plans to bump the rate to $15 per sf and restructure all leases to triple net, according to Abbott.