RIVERSIDE, CA—Hanley Investment Group has completed the $15.2 million sale of a newly-built 45,000-square-foot, single-tenant, fee simple retail investment occupied by LA Fitness in Riverside, CA. SVP, Pat Kent and EVP Bill Asher of Hanley Investment Group represented the seller, GRAE La Sierra LLC of Los Angeles.
GRAE La Sierra LLC is a subsidiary of Seagrove LA, a commercial real estate development company headed by Rick Edwards, which is developing six to eight new projects annually in Los Angeles, Orange and Riverside counties.
The buyer, which was represented by George Ragheb of Entrance Homes Inc. of Irvine, CA, was a private investor from Lakewood, CA.
Kent exclusively tells GlobeSt.com that “Historically investors have proceeded cautiously when evaluating a health club due to their special purpose build-out and the potential costs they might incur if the health club ever vacated in the future.”
He explains that “Values have changed dramatically in the last 24 months as the average cap rates for single-tenant health clubs in California have compressed approximately 100-150 basis points, one of the most significant cap rate compressions in the single-tenant retail sector.”
The property is located at 10988 Magnolia Ave., near the intersection of La Sierra Avenue and Magnolia Avenue. Built in 2015 on 3.38 acres, LA Fitness featured a new 20-year primary lease term, with six option periods. LA Fitness is part of a larger overall shopping center, La Sierra Plaza, which includes Walgreens, El Torito, Farrell's Ice Cream Parlour Restaurant, Jiffy Lube, Panda Express, Red Lobster and the County of Riverside.
Asher notes, “It was evident during our marketing process that LA Fitness identified a void when the company selected this particular area of Riverside as well as the strategic location, which is convenient to Interstate 91 (140,000 cars per day), next door to Kaiser Permanente Riverside Medical Center (40-acre campus), and minutes from the Galleria at Tyler (1.2 million square foot regional mall). We were able to procure a buyer we had transacted within the past that had a firm understanding of these attributes and the strength of LA Fitness as a tenant, resulting in a secure long-term stable acquisition.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
