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McCarthy Ranch Marketplace Under Contract

MILPITAS, CA-Rreef Funds is selling the 265,324-sf retail power center here in the heart of the Silicon Valley to Cupertino-based Sobrato Development Cos. for a price believed to be in the upper $60-million range.

By Brian K. Miller | Updated on January 29, 2006

(For more retail coverage, click GlobeSt.com/RETAIL.)

MILPITAS, CA-Sobrato Development Cos. is under contract to acquire the 265,324-sf first phase of McCarthy Ranch Marketplace here for a price believed to be in the upper $60-million range. Annual small shop and restaurant sales at the well located institutional-grade center are between $600 and $800 per sf, according to sources familiar with the property. The seller, a separate account client of Rreef Funds, acquired the eight-year-old property in the late 1990s for $38 million. The transaction is expected to close around the end of February.

McCarthy Ranch Marketplace sits at the intersection of Highway 880 and State Highway 237, a location that benefits from some of the highest traffic counts in the country and exceptional demographics. Built in 1995 by Irvine Co., Phase I has a total of 21 tenants, 17 of which are investment grade national credit including Border’s Books and Music, Best Buy, PetsMart, Office Max, Ross Dress for Less and Jamba Juice. Adjacent to a Wal-Mart store, the center is 100% leased. The in-place capitalization rate on the deal is believed to be between 5.5% and 6.25%.

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