(For more retail coverage, click GlobeSt.com/RETAIL.)
GILROY, CA-Gilroy Crossing, a retail power center here has changed hands for $86 million. The sale included 325,431 sf of the 480,000-sf center, which opened in 2004 and is 100% leased.
The center occupies the southeast quadrant of Highway 101-Highway 152 interchange. Tenants include Target, Kohl's, Sportmart, Ross Dress for Less, Bed Bath & Beyond, Michaels, Barnes & Noble, PetsMart, Pier 1 Imports and Beverages & More. The sale included everything but the Target.
Lucescu Realty of Newport Beach, CA had the disposition assignment. Mark Lucescu tells GlobeSt.com that the deal included the assumption of a $50-million, interest-only loan. Lucescu declined to say what the sale price translates to in terms of a year-one cap rate, citing client confidentiality, but other retail brokers have told GlobeSt.com in the recent past that class A centers such as this are attracting offers that equate to cap rates of between 5.5% to 6%.
"We had 36 bids," Lucescu says. "There are a dearth of quality properties out there, and the major retailers here are No. 1 in their respective categories."
Gilroy is the fastest growing community in the Silicon Valley. Its population is expected to increase 33.3% by 2010. The new owner of Gilroy Crossing is Lak Properties-Gilroy LLC, a private investor from San Jose. The seller, Gilroy Crossing Center LLC, is a private investor based in Los Angeles.
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