(For more retail coverage, click GlobeSt.com/RETAIL.)
IRVINE, CA-Appetite for retail property remains healthy throughout California, as evidenced by a flurry of recent deals. In all, the deals topped $36 million in value and include three single-tenant assets and a grocery-anchored shopping center that required a value-add play.
The Irvine-based Reza Investment Group brokered all four of the deals. The grocery-anchored site was one Reza had previously brokered. "We sold the property to the seller about three years ago," says Reza Etedali, CEO and founder of Reza Investment Group, of the Pines Shopping Center located in Palm Desert. "At that time, there was uncertainty whether or not the grocer, Vons, would renew their lease."
Adding to the uncertainty was the fact that the shopping center needed a rehab. "The center was tired and needed renovation," Etedali adds. "The seller renewed the Vons lease, leased up the vacancies and remodeled the exterior of the property. In addition, Vons completed a four-wall remodel at their own expense. We found a buyer who was looking for a stabilized property in an A location that met the qualifications and timing for their 1031 exchange."
The center was recently purchased from Portland, OR-based SKB-PTP LLC by Los Angeles-based Royal Investors for $17.4 million. Other tenants within the 81,722-sf center, which is situated along State Highway 111, include Washington Mutual and Verizon.
Investment for single-tenant assets has been strong with deals closing recently in San Juan Capistrano, Los Angeles and Torrance. "While our core business has historically been concentrated in shopping centers, we have always actively participated in high-quality, single-tenant assets in in-fill Los Angeles and Orange County as part of our advisory business," says Terry Bortnick, president of Reza Advisory Group.
The largest of the three sales was the $13.9 million, Torrance-based Carmax deal that involved a fee-ownership interest in a 3.12-acre parcel of land. The car-buyer corporation will occupy the parcel for a 20-year initial lease term. It will construct and complete all of the property's improvements, including a parking structure, which should total about $9-million.
Santa Ana-based Torrance City Portfolio LLC purchased the property from Beverly Hills-based Pearl Lane Torrance LLC & Lane Torrance LLC at a 6.3% cap rate. The other two deals involved the $3.1-million sale of Los Angeles' Island Pacific Supermarket, an Asian grocer that has leased the entire 9,700-sf building, and the nearly $1.8-million sale of an El Pollo Loco in San Juan Capistrano.
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