TORRANCE, CA—A multi-tenant retail center with no national tenants has traded hands in a competitive transaction that drew multiple offers. Village Center, the 31,135-square-foot retail property, traded hands between two unnamed local investors for $11 million or $353 per square foot. The property has a strong value-add play and sits on a high-traffic intersection.

“The sellers were in their late 70s and had owned the property for over 35 years, and they were just looking to sell and retire,” Simon Mattox, a broker in Marcus & Millichap's national retail group, tells GlobeSt.com. “They felt like this was a good time for them both from a market standpoint and a personal standpoint.” Mattox represented the seller in the transaction.  

The property sits on 2.6 acres on a signalized traffic corner, and is 90% occupied. Those details helped bring strong interest in the fully marketed transaction. “We received a lot of interest from developers and exchange buyers looking for really good real estate,” says Mattox. “This property has 2.6 acres, which is really hard to find on a signalized corner in the South Bay. This is a great location. The center has been there since the 70s, and it is a good stable location right now with a lot of potential to redevelop it in the future.” Mattox had one buyer fall out during escrow—due to their inability to perform—but had several back-up offers for the property even during the escrow period. When the buyer fell out, the team turned to a back-up offer, and went right back into escrow on the property.

Although the property is currently occupied by mom-and-pop-type local retailers, Mattox believes that can accommodate a national tenant. In fact, Walgreens was strongly perusing the property several years ago, but the owners at that time were not looking to sell. Walgreens moved into an adjacent location, but the potential to house a major tenant is still strong.

Both this sale and the strong investor interest in the property show that the retail sector is definitely back. “Retail is catching up to multifamily,” says Mattox. “Multifamily has definitely led the market, and I think retail now is following suit as rents are going up on PCH. A lot of the owners had given tenants a break in 2010 and 2011 because the economy was slow, so a lot of owners were actually reducing rents to keep their tenants in place. Now that the economy has recovered, it means those rent concessions are expiring and rents are starting to go up, and as a result, those properties are becoming more and more valuable.”