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Commercial Real Estate Transactions

Progressive Real Estate Partners Sells Foothill Village Shopping Center in Fontana, CA for $5.3M

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Commercial Real Estate Transaction Alert

Progressive Real Estate Partners, the leading Inland Empire retail real estate brokerage firm, announced today the sale of Foothill Village, a 24,895 square-foot unanchored multi-tenant retail center located at 14755 Foothill Boulevard in Fontana, California.  The property sold for $5.3M in an all-cash 1031 exchange transaction.  The 100% occupied neighborhood center is in a densely populated area with more than 140,700 residents within 3-miles earning an average household income of $89,700.   

Progressive Real Estate Partners’ Vice President of Investment Sales Greg Bedell, CCIM and Senior Retail Specialist Albert Lopez exclusively marketed the property and represented the seller, a private Los Angeles-based investor. Bedell also represented the buyer, a private Los Angeles-based investor.  In addition to helping with the sale of the center, Lopez was also instrumental in creating significant value for the ownership thru the lease-up of approximately 5,000 square-feet. Additionally he successfully renegotiated multiple leases that were month to month at below market rents to long term leases at current market rates.   

Built in 2006, Foothill Village features high quality modern architecture and is home to a robust mix of 13 internet-resistant food and service retailers. The center benefits from its excellent location along Foothill Boulevard, a primary retail corridor, with visibility to over 36,600 vehicles per day. Furthermore there is a thriving daytime marketplace of 32,000+ employees in a 3-mile radius driven by the 7.3M square-feet of industrial distribution centers across from the property many of which are occupied by national brands such as Target, UPS and Mercedes Benz.  The property is also adjacent to the Heritage Village master planned community with 3,300 single family homes.

According to Bedell, “Unanchored retail centers like Foothill Village have been one of the most challenging type of assets to sell during the pandemic.  Fortunately most of the Foothill Village tenants weren’t significantly impacted and, for those that were affected, we worked closely with the ownership to address any rent concerns resulting in the property achieving a high level of rent collection compared to the industry average.” 

Bedell added, “The property checked all the boxes for the buyer’s 1031 exchange goals including the center’s prime location, 100% occupancy, internet resistant tenant-mix and positive rent collection history.  According to CoStar, Foothill Village is one of only three Inland Empire unanchored multi-tenant retail centers over $5M to have traded since the start of the pandemic.”    

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Commercial Real Estate Transactions

SRS’ National Net Lease Group Brokers $13.95 Million Sale of Ramona Plaza, a 102,546-SF Retail Center in Hemet, CA

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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.

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Commercial Real Estate Transactions

Hanley Investment Group Completes 4th Retail Property Sale at Monterey Crossing in Palm Desert, Calif.

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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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Commercial Real Estate Transactions

Stos Partners Acquires 139,000sf Industrial Building in Jurupa Valley, CA for $19.8 Million

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COMMERCIAL REAL ESTATE TRANSACTION ALERT

Stos Partners, one of the most active commercial real estate investment and management firms in Southern California, has acquired a 139,000 square-foot industrial asset in the Inland Empire submarket of Jurupa Valley, California from a private seller for $19.8 million.

According to CJ Stos, Principal at Stos Partners, the firm saw immense potential in the property based on the under-served demand for quality manufacturing space in the market, and quickly moved forward to negotiate a competitive purchase price.

“While much of the current development and investment activity in the Inland Empire involves Class A distribution centers, there remains a strong demand from companies that understand the value of maintaining and growing manufacturing operations in this key industrial market,” explains Stos. “Most Southern California submarkets are seeing industrial vacancy rates in the one-percent range. As one of the most active buyers of industrial product in the region, our team immediately recognized the value of adding this core asset to our growing portfolio.”

Stos notes that the firm will implement a value-add strategy at the property, which was built in 1986, to bring a competitive manufacturing asset to the market. 

“Drawing upon extensive experience in value-add renovations and market demands, our upgrades to the property will include office improvements, new paint, roof work, and repaved asphalt,” continues Stos. “Further, we recognized the potential for repositioning the ample 8.24 acres of land the property sits on, and will convert the excess land into yard space.”

Tanner Jansen, Vice President of Acquisitions at Stos Partners, adds that the firm is working closely with the City of Jurupa Valley to attract a tenant that would benefit the local business community and ensure the project is aligned with the city’s current moratorium that temporarily bans ‘truck-intensive’ projects.

“With the moratorium in mind, we met with the city of Jurupa Valley to better understand what the city envisioned for this vacant industrial asset,” says Jansen. “We ultimately developed a business plan that leverages the asset’s positioning and will help realize its full potential.”

The property is located at 10220 San Sevaine Way in Jurupa Valley, California. Stan Nowak and Cody Lerner of Avison Young represented Stos Partners as the buyer in the transaction. The seller was also represented by Nowak and Lerner along with John Pinjuv.

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