COMMERCIAL REAL ESTATE TRANSACTION ALERT
Avison Young announced today it has completed the $4.27 million portfolio sale of two vacant medical office buildings located at 818 and 830 Magnolia in Corona, CA.
Avison Young Principal Michael Dettling and Vice President Steven Tronson who are located in the Los Angeles North office represented the seller, a Los Angeles-based private trust. There were separate buyers for each of the properties, both of which are local physicians who plan to occupy a portion of the building and lease out the remaining space. Dettling and Tronson also represented the buyer for 830 Magnolia.
Following is information on each property:
- 818 Magnolia totals 10,420 square feet (sf) and was sold for $2.15 million.
- 830 Magnolia totals 10,471 sf and was sold for $2.12 million.
Built in 1999, the buildings were recently vacated by a single user who had occupied them in their entirety for more than 15 years for its medical practice.
“With interest rates being very low currently, our team secured several strong offers at very close to the asking price from physicians interested in an owner-user situation,” said Dettling.
Tronson added, “This area of Corona provides a dense population for a strong patient draw and was attractive due to the buildings’ location on a major thoroughfare and proximity to the 91 and 15 freeways.”
SRS’ Investment Properties Group Brokers $35 Million Sale of Major Portion of One Eleven La Quinta Center, a 154,383-SF Retail Community Center in La Quinta, CA
SRS Real Estate Partners’ Investment Properties Group (IPG) announced it has completed the $35 million sale of a 154,383-square-foot portion of One Eleven La Quinta Center, a retail community center located at 78959 CA-111 in La Quinta, CA.
SRS Senior Vice Presidents Chris Tramontano and John Redfield represented the seller, a Coachella Valley-based private family office. The buyer, Anaheim, CA-based Milan Capital Management, represented themselves. Terrison Quinn and Casey Mahony of SRS Real Estate Partners have and remain exclusive leasing agents for the asset which was 79% occupied at the close of escrow.
Tenants in the center that were part of the property sale include Ross Stores, Staples, Petco, Big 5 Sporting Goods, among others. The center is shadow anchored by tenants that include Stater Bros, Hobby Lobby, and Kohl’s.
Built in phases between 1992 and 2002, this is the first sale of the center since development over 30 years ago. One Eleven La Quinta Center totals 852,465 square feet and is situated on 19.57 acres of land. An irreplaceable highly-successful center, One Eleven La Quinta Shopping Center is located at one of the best intersections in all of the Coachella Valley, Washington & 111 visible to over 70,000 cars per day.
“The sale of One Eleven La Quinta Center was a very detailed complex transaction with several obstacles to overcome, including multiple loans on different portions of the property, a rising interest rate environment and a new Panera Bread pad development still in the contingency period that was critical to the proforma NOI that was underwritten. I’m proud of our investment sales and leasing teams for coming together and providing excellent execution for both the seller and buyer,” said Tramontano.
“After 30 years of successful operation of One Eleven La Quinta, the seller was ready to pass the baton to a great southern California operator. This transaction had its challenges and many moving pieces, fortunately all outside of the high-quality real estate that was purchased. Chris Nichelson and the Milan Capital Management team demonstrated at great lengths their expertise in completing this transaction. This was a team effort and I’m excited to see the value Milan and the SRS leasing teams add to take the center to new heights,” said Redfield.
“We have been working with the seller and the SRS team for many years to acquire this well-located asset,” said Chris Nichelson, President of Milan Capital Management. “Their professionalism and diligence helped us overcome numerous challenges to get this deal done in an increasingly difficult environment. We are excited to have the opportunity to continue the original developer’s legacy, and to take this property to the next level.”
“One Eleven La Quinta Center is one of the preeminent retail centers for the Coachella Valley since its inception. It was important for the seller that the project’s legacy of success endures. Milan Capital Management’s level of sophistication and vision for the center made it clear they were the perfect buyer. The collaboration with the SRS capital markets team was critical to completing what was a very complicated transaction to the benefit of both parties. Under the stewardship of Chris Nichelson and Milan Capital Management’s team, we already have several new tenants in negotiation and the new Panera drive-thru is scheduled to open this fall,” shared Mahony.
Located along Highway 111, the region’s major retail corridor, the property is within a dense, affluent trade area with a population of 160,000 and more than 58,000 employees within a five-mile radius.
In 2021, SRS’ Investment Properties Group (IPG) and National Net Lease Group (NNLG) completed more than $3.1 billion in deal volume comprised of 899 transactions in 49 states, and currently have more than $2 billion in property on the market, with nearly 200 properties sold year-to-date in 2022.
SRS’ National Net Lease Group Brokers $13.95 Million Sale of Ramona Plaza, a 102,546-SF Retail Center in Hemet, CA
COMMERCIAL REAL ESTATE TRANSACTION ALERT
SRS Real Estate Partners’ National Net Lease Group (NNLG) announced today it has completed the $13.95 million sale of Ramona Plaza, a 102,546-square-foot (sf) retail center located at 1300-1480 E. Florida Avenue in Hemet, CA (a city in Riverside County).
SRS NNLG’s Winston Guest, Matthew Mousavi and Patrick Luther represented the seller, a Southern California-based investor. The buyer, a California-based private investor was represented by The Visintainer Group.
Built in 1974 and situated on 6.41 acres, Ramona Plaza was 88% occupied at the close of escrow with anchor tenants including Grocery Outlet, Planet Fitness, and Dollar Tree which all recently extended their leases. National brands such as Aaron’s, Leslie’s Poolmart, Subway, and Little Caesars Pizza, among others, are also tenants.
The property was attractive to the buyer as it was priced well below replacement cost at $137 per square foot, and featured upside potential through lease-up of the vacancies and bringing some tenants up to market rents.
“We generated over a dozen offers on this asset which is testimony that multi-tenant retail investment property in Southern California continues to garner strong interest. Investors were attracted to the well-positioned corner location of this grocery-anchored shopping center with a quality tenant line-up that offered essential service and e-commerce resistant business,” said Guest.
“Inland empire markets like Hemet are receiving renewed interest, most notably driven in part by substantial growth in the industrial and manufacturing markets in these areas, drawing investment toward the retail sector as well. Being a value-add grocery anchored center in SoCal, Ramona Plaza offered a rare investment opportunity,” added Mousavi.
Ramona Plaza is located at the highly trafficked, main and main intersection of E. Florida Avenue and N. San Jacinto Street which sees more than 57,000 vehicles passing by daily. The property benefits from significant frontage along E. Florida Avenue, the primary retail corridor for Hemet with excellent visibility and access. Over 170,000 residents and more than 29,000 employees live and work within a five-mile radius of the property.
In 2021, SRS’ Investment Properties Group and National Net Lease Group (NNLG) completed more than $3.1 billion in deal volume comprised of 899 transactions in 49 states, and currently has more than $2 billion in property on the market, with nearly 200 properties sold year-to-date in 2022.
Hanley Investment Group Completes 4th Retail Property Sale at Monterey Crossing in Palm Desert, Calif.
COMMERCIAL REAL ESTATE TRANSACTION ALERT
New construction Habit Burger Grill Drive-Thru sells for $4.57 million, representing a record-low cap rate nationwide for a single-tenant Habit Burger Grill
Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm arranged the sale of a 2021-new construction, single-tenant The Habit Burger Grill Drive-Thru at the newly developed Monterey Crossing shopping center at the Interstate 10 and Monterey Avenue interchange in Palm Desert, California. The sale price was $4.57 million. This transaction marks the fourth retail pad building Hanley Investment Group has sold at Monterey Crossing, totaling a combined 17,060 square feet and approximately $20.3 million.
Hanley Investment Group’s Executive Vice Presidents Bill Asher and Jeff Lefko represented the developer and seller, Fountainhead Development of Newport Beach, California, in all four retail transactions. John Costa, David Fults and Brian McLoughlin of Voit Retail Estate Services in Los Angeles represented the buyer of The Habit Burger Grill Drive-Thru, a private investor based in Southern California. Previous sales included two brand new, single-tenant ground leased pads to Chick-fil-A Drive-Thru and Quick Quack Car Wash, along with a two-tenant pad building occupied by AT&T and Spectrum. All four properties were sold to four separate buyers at record-low cap rates.
The single-tenant net-leased investment occupied by a new, 2,700-square-foot Habit Burger Grill is situated on 0.91 acres at 73320 Dinah Shore Drive in Palm Desert. According to Asher, “We created a competitive bidding process that helped secure a 1031 exchange buyer at 100% of the asking price,” said Asher. “The sale represented a record-low cap rate for a single-tenant Habit Burger Grill nationwide.”
The Habit Burger Grill is known for its signature Charburgers and fast-casual dining experience, notes Asher. The menu also includes sandwiches, fresh salads, a variety of sides and more.
In March of 2020, Yum! Brands, which owns Taco Bell, KFC and Pizza Hut, finalized the purchase of the Southern California-based burger chain for around $375 million. Today, Habit Burger currently has 340 locations globally with the majority of its locations in California.
“The new Habit Burger Grill’s Palm Desert location incorporates indoor dining, patio dining and drive-thru to maximize sales,” said Asher. “The pandemic certainly shined a very bright light on the impact of having a drive-thru. Approximately 70% of quick-serve restaurant sales were generated through a drive-thru and sales were approximately 50% greater in locations that had a drive-thru. We expect to see more QSRs with drive-thrus as companies roll out their prototypes across the U.S.”
Monterey Crossing is strategically located at the signalized intersection of Monterey Avenue and Interstate 10 freeway, one of the most centrally located and heavily visited interchanges (110,000 cars per day) in the Desert Cities area of Southern California and a primary east/west arterial connecting to Los Angeles to San Bernardino County, Riverside County and Phoenix, Arizona. Monterey Avenue (37,000 cars per day) is the major north/south connector between the freeway, resorts and high-income communities of Palm Desert, Rancho Mirage and Cathedral City.
Fountainhead is currently developing additional single-tenant pads and multi-tenant buildings in the first phase of the project in addition to a second phase of the shopping center, which combined will ultimately feature 17 acres of best-in-class retail.
Monterey Crossing also benefits from freeway-visible pylon signage and is the first Palm Desert center to be approved for freeway signage, according to Asher.
National tenants located at the intersection of Monterey Avenue and Interstate 10 include Costco, Home Depot, Kohl’s, Sam’s Club, Walmart, 99 Cents Only, Ashley HomeStore, JOANN Fabrics and Crafts, PetSmart and Regal Cinemas.
Palm Desert is the geographic center of the Coachella Valley, a fast-growing region of Southern California. Within a three-mile radius of Monterey Crossing, the population increased by 53% between 2000 and 2020 and is projected to grow an additional 7.4% by 2025. The average household income is currently $106,000. There are more than 4,500 new residential units planned or under construction within a 2.5-mile radius of Monterey Crossing.
“In 2022, we anticipate developers and shopping center owners will continue to see the accretive value of implementing a break-up sale strategy to capitalize on the high demand for single-tenant and multi-tenant retail pad product at premium pricing,” said Asher.
Hanley Investment Group has sold more than $407 million in retail properties in the Inland Empire in the last 36 months.
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