They also say that there was a “good herd of investors looking to take this deal down,” and that available financing has made the deal even more attractive. In addition, Highpoint was able to achieve a loan-to-value ratio of 70% financing, which helped close the deal.

The brokers tell GlobeSt.com that the center caters to Palmdale’s large Hispanic community, and that Vallarta is one of the biggest and most successful ethnic grocers out there. “They have two other locations within a five-mile radius, and sales are well above normal levels for a grocery store. Investors may shy away from centers anchored by a big grocer, but these Hispanic grocers do extremely well. Investors are noticing that and are becoming comfortable with putting their money in centers with ethnic grocers.” Vallarta is also in the midst of a long-term lease at Palmdale Gateway, making it an especially desirable tenant for the new owner.

The BRC brokers add that with such a large pool of buyers chasing a limited amount of inventory, many retail investors have shifted their focus to secondary markets such as Palmdale, where they can get a higher yield than they would with a core asset. “It’s a little bit out of the way, but these anchors perform better than some infill markets.”

Retail centers seem to be generating a lot of activity in this market. As GlobeSt.com previously reported, last week Tejon Ranch Co. and the Rockefeller Group teamed up to build a premier outlet center at just south of Bakersfield, and LandMark Retail Group completed construction on two California CVS/Pharmacy stores, one in Bakersfield and one in Palmdale.