Deka Immobilien Buys Santa Monica Retail Building for $54M

Deka Immobilien has acquired a single-tenant retail property in Santa Monica for $54.25 million from Tooley Interests LLC. The 29,064-square-foot property is fully occupied by a Whole Foods grocery story. Deka Immobilien acquired the property through its fund Deka-ImmobilienNordamerika, and the transaction is its second purchase on the West Coast.

The sale is a quintessential example of the investor demand for retail product. Over the last two years—as a result of the ongoing pandemic—grocery stores are experiencing record sales. According to Driss Oualkadi, president Deka Immobilien in the USA, the trend is what attracted the company to this Whole Foods-occupied single-tenant property. “This asset’s established and necessity-based footprint, combined with a long-term lease in the heart of Santa Monica, is an ideal example of the opportunities we seek to acquire as we enter into 2022,” he said in a statement.

There has been a boom in single-tenant net lease transactions across the country as a result. Per a report from November, single tenant net lease sales volume hit $20.7 billion, enjoying its sixth strongest quarter on record in Q3, with office clocking in at $7 billion (up 30% from last quarter), industrial hitting $10.7 billion (up 11% from last quarter), and retail posting $3.1 billion (down 31% from last quarter). In an interview at the time, Lanie Beck, Stan Johnson Company Director of Corporate Research, Marketing & Communications said, “early predictions put 2021’s estimated annual total around $75 billion, which would make it the second strong year in history.”

In Los Angeles, last year was packed with significant single-tenant retail deals. In one example, Newmark brokered the sales of three single-tenant retail properties in the Los Angeles area for a total of $100 million. A Home Depot, an Amazon Fresh facility and a Chick-Fil-A were the three properties to trade hands in separate transactions.

Whole Foods Santa Monica is located within 10 miles of the 10 freeway in a high-income area where the average household brings in $160,000 per year. Tooley purchased the property in 2013 and secured Whole Foods as a tenant in 2017. The JLL Retail Capital Markets managing directors Gleb Lvovich, Geoff Tranchina and Bryan Ley and senior director Danial Tyner represented the seller in the deal.