Shrader: La Jolla is really two markets within a market. It's not like Rodeo Dr. with Gucci and Ferragamo and other high-end brands, but it's a mixture of tourist attractions and neighborhood uses. Farrther south, closer to where the Vons is, are the neighborhood retailers, but on Prospect—where this deal is—it's more serving financial people or tourists in the market these days. There's a strong tourist and international component in the market in addition to the locals, but the former outweighs the locals.

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GlobeSt.com: What types of investors are most interested in this market?

Shrader: The thing about La Jolla is it's a very affluent area, and you don't see a lot of these properties trading. A lot of them sit for 40 to 60 years in the same family. When they do come to market, you're seeing family investors interested—someone who could walk to the site from his home, which was what attracted him to it. For others, thanks to the international draw that La Jolla has become, a lot of international buyers are looking at properties here. We're seeing buyers from Mexico and Latin America, as well as Asian and Chinese investors looking at the market.

GlobeSt.com: What is happening in terms of development in this market?

Shrader: In this market, La Jolla Village is very specific. It's a little bit hard to get in and out of. The Lot came in recently, bringing in high-end movie theaters where you sit in Barca loungers, and the Music Society building is being built. You're seeing a lot of arts and culture coming in, but the rest of the development is multifamily. It's a coastal market, and investors are doing multi-story townhome projects. You're seeing people wanting to be here, but we're out of land.

GlobeSt.com: How common is adaptive reuse from office to mixed-use retail and residential in La Jolla?

Shrader: It's always cheaper to convert than to build from the ground up. In this case, you have a '60s-era office building which, if the developers tried to build it now, they wouldn't get a permit—it's taller than what the Coastal Commission allows. It lends itself to conversion to mixed use with ground-floor retail. It's selling for well for more than $1,000 per square foot, which is higher than any residential development in San Diego, with drop-dead-gorgeous views.

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LA JOLLA, CA—Combine bifurcated retail that serves locals, tourists and international visitors with high-end residential and you're looking at a market that can fetch well over $1,000 per square foot, Colliers International urban-property professional Bill Shrader tells GlobeSt.com. Shrader, along with colleagues David Maxwell Joe Brady and Luke Holler of the firm's urban-property group, recently represented seller Hammer Ventures on behalf of RREF II-HV Prospect Property Owner LLC in the sale of a 3,517-square foot, two-unit retail condominium here to the Cove Equity Group LLC, which represented itself.

The condominium is located at 1020 Prospect Street on the ground floor of Muse, a new 16-unit, ultra-luxury residential building currently under redevelopment. According to Colliers, the current restoration and renovation of the property preserves the integrity of the architects' original modernist vision while elevating the property to a whole new level that meets the expectations of modern luxury.

We spoke with Shrader about the La Jolla retail market and what investors are seeking in it.

GlobeSt.com: How would you characterize the La Jolla retail market?

Shrader: La Jolla is really two markets within a market. It's not like Rodeo Dr. with Gucci and Ferragamo and other high-end brands, but it's a mixture of tourist attractions and neighborhood uses. Farrther south, closer to where the Vons is, are the neighborhood retailers, but on Prospect—where this deal is—it's more serving financial people or tourists in the market these days. There's a strong tourist and international component in the market in addition to the locals, but the former outweighs the locals.