LOS ANGELES—JH Real Estate has acquired the Hawaiian Gardens Town Center, a 124,645-square-foot grocery-anchored shopping center, from HP Investors for $33 million. The transaction was highly competitive and attracted multiple offers, illustrating the high investor demand for grocery-anchored retail.

“We had very strong interest from a variety of buyers including private investors, exchange buyers, institutional advisors and REITs,” CJ Osbrink, an associate director at HFF, tells GlobeSt.com. “The marketing process was very competitive generating multiple competitive offers as a result of the lack of grocery-anchored retail for sale in Southern California. The sales price matched the guidance provided to our client.” Osbrink represented the seller in the transaction along with his HFF colleagues senior managing director Ryan Gallagher and managing director Bryan Ley.

Located at 12090-12144 Carson Street in the South Bay, the five-building property was renovated in 2012 and 2013. It is 95% leased to a tenant mix that includes O'Reilly Auto Parts, Sally Beauty Supply, MetroPCS, Hertz Rent-a-Car and Rent-a-Center, as well as a recent lease with Walmart Neighborhood Market. “The seller had signed a recent long-term net lease with a national credit grocer, Walmart Neighborhood Market,” says Osbrink. “As a result of this and improving market fundamentals, the remainder of the shop's vacancy dried up very quickly.”

The popularity of the sale really shows the strength of the retail sector, which, according to a recent Lee & Associates report, has historically low vacancy rates of 6% nationally. “We still continue to see a broad buyer pool and competitive pricing for the most well-located, necessity anchored retail centers,” says Osbrink. “The low cost and availability of capital targeting grocery-anchored assets in primary markets is exceeding the supply of product available for sale. As a result, we continue to see investors pushing into secondary markets or pursuing deals with non-traditional grocery anchors. This asset checked a lot of boxes for buyers and as a result we saw significant interest from buyers, including new buyers and non-traditional retail buyers.”