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Progressive Real Estate Partners Sells Single – Tenant Popeyes in SoCal’s Inland Empire for $1,006 PSF

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Rancho Cucamonga, CA – August 28, 2019 – Progressive Real Estate Partners, the leading Inland Empire retail real estate brokerage firm, announced today the sale of a single-tenant Popeyes Louisiana Kitchen drive-thru restaurant located at 501 East 5th Street in Beaumont, California. The property sold for $2,265,000 representing a record $1,006 per square foot for a single-tenant Popeyes in SoCal’s Inland Empire.

Progressive Real Estate Partners Vice President of Investment Sales Greg Bedell, CCIM exclusively marketed the property and represented the seller, a private Riverside-based investor. The buyer, a private San Jose-based investor, was represented by Cindy Hipwell of Hipwell Real Estate.

Built in 2008, the recently upgraded 2,250 square foot restaurant is located immediately adjacent to the heavily traveled I-10 freeway along the Beaumont Avenue off-ramp and benefits from excellent access, pylon signage and approximately 152,000 cars per day passing by the site. The restaurant is operated by an established franchisee with multiple locations throughout Riverside County.

With a population that has tripled since 2000, Beaumont is the 4th fastest growing city in California. Furthermore the area has attracted significant e-commerce industrial development, including a new 640,000 square foot Amazon fulfillment center, creating a strong daytime workforce.

According to Bedell, “The buyers were seeking a 1031 exchange property that was non-management intensive and a secure investment that would provide stable cash flow. Popeyes’ rare 20-year absolute NNN lease with 18+ years remaining, Interstate 10 off-ramp location, and prominent positioning in California’s 4th fastest growing city all combined to make the property a clear favorite.”

He added, “Through our broad-based marketing campaign and reputation of cooperating with outside brokers, we generated nine qualified and competitive offers. Investor response to this asset clearly demonstrates the continued demand for well-located single tenant national brand fast food restaurants in strong markets like the Inland Empire.” Founded in 1972, Popeyes is one of the world’s largest chicken quick service restaurants, with over 2,700 restaurants in the US and around the world.

 

About Progressive Real Estate Partners

Progressive Real Estate Partners (PREP) is a boutique commercial brokerage firm headquartered in Rancho Cucamonga, California. Founded in 2008, the firm specializes in the leasing and sale of retail properties in Southern California’s Inland Empire. The firm is also the exclusive Inland Empire representative of the Retail Brokers Network (RBN). Since the firm’s inception Progressive has completed over 1,000 lease and sales transactions in over 35 cities throughout the region. Progressive uses the latest marketing and brokerage techniques to help retailers and property owners achieve their real estate goals. For further information visit www.progressiverep.com. You can also follow Progressive Real Estate Partners on Linkedin, Twitter, Instagram and Facebook.

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

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Commercial Real Estate Transactions

DAUM Commercial Completes $16M Sale of 49,561 Square Foot Industrial Property in Corona

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Deal follows value-add strategy with brokerage assisting ​ with upgrades, repositioning in strong Inland Empire market

DAUM Commercial Real Estate Services, a leading provider of commercial real estate services including brokerage, tenant representation, consulting, leasing, sales, and property management, has completed the sale of a 49,561 square foot industrial building in Corona, Calif. The total consideration for sale of the building was $15.99 million.

The property at 1141 California Ave. in Corona, Riverside County, was built in 1988. In 2023, the asset was purchased by PPVS Properties LLC. With the assistance of their Daum Commercial team, the company worked to renovate the property and reposition the site for possible industrial lease or sale.

The free-standing industrial building of over 49,000 square feet sits on a more than 2.5-acre site with ample space for employees, customers, and commercial truck parking. The warehouse building consists of cross-dock loading with four grade level doors and six dock high doors. The property has a fenced-in yard area, an interior warehouse clearance of 24 feet, and a 2,169 square foot office space. The warehouse, office, yard, and loading areas were all fully renovated to a turnkey, move-in position.

With close access to the I-15 Freeway, Ontario International Airport, and the Port of Long Beach, Riverside County is the 10th largest county in the U.S. with a gross domestic product of $115.4 billion as of 2021. These strategic advantages have bolstered the region’s industrial real estate market amid the recent uncertainty in the national economy.

According to DAUM’s Q1 2024 Market Report, Southern California’s Eastern Inland Empire is currently experiencing direct vacancy rates of 5.2% and an overall vacancy of 7.6% driven primarily by an increase in available sublet space. New deliveries of industrial space accounted for 1.6 million square feet with another 5.5 million under construction. Asking rents fell in Q1 to $1.21 per square foot. High interest rates have tempered overall sales with volume in Q1 down 27.9% compared to Q4 2023 with a median per square foot price of $235.89.

Commercial Edge, a real estate data provider, noted that in-place rents increased in February by 12.7% year-over-year across the entire Inland Empire leading the entire country. Between 2021 and Q1 2024 rents in this market have grown by over 60%.

The DAUM Commercial team of Johnson, Joseph Harmon, SIOR; and Noah Samarin, EVP and Principal, represented the seller. Clyde Stauff, SIOR, Jace Gan, and Jackson Marlow of Colliers International’s Orange County represented the buyer, who will use the property to expand their existing flooring business.

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Commercial Real Estate

3PL Providers in the Inland Empire Top Big-Box Warehouse Demand in 2023

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Third-party logistics (3PL) providers leased the most big-box warehouse space in the Inland Empire (IE), accounting for 58.6% of all transactions, the highest of any market in a new report from CBRE.

“The themes of rightsizing and streamlining supply chains, efficiency, flexibility and value stand out in this environment,” said Ian Britton, senior managing director at CBRE. “Companies seem more willing to outsource and utilize 3PL providers to avoid hiring their labor force, expensive set-up costs and capital investment in material handling, technology and automation.”

The IE continues to be one of the most in-demand big-box industrial markets, with leasing surpassing 30 million sq. ft. for four consecutive years. This trend is expected to continue throughout the year as occupiers aim to strengthen their storage and distribution capabilities.

“At the end of the day, it is about reducing delivery times to customers by using a 3PL network of strategic locations to access Southern California’s 24 million people as soon as possible,” Mr. Britton said.

More space became available in IE due to completed construction and tenant move-outs, increasing the overall vacancy rate to 3.7% in 2023. This vacancy rate is still relatively low compared to other cities, ranking fourth lowest in this report behind Mexico City, Los Angeles County and Nashville.

“Most agree that long-term fundamentals look solid, but many IE tenants have available capacity in their warehouses as demand levels have normalized from the pandemic-induced surge,” added Mr. Britton. 

Nationally, industrial construction activity peaked in 2023, with a record 413 million sq. ft. delivered to the market, causing a doubling of the vacancy rate to 6.6%. However, construction in progress dropped to 208.4 million sq. ft. by year end, half of the previous year’s total.

Retailers and wholesalers dethroned 3PL providers across North America taking 36% of all transactions. In addition to retailers & wholesalers, automobiles, tires & parts and building materials & construction also saw an increase in share of leasing activity, which overall fell 15.8% in 2023.

CBRE forecasts a 5% increase in big-box leasing volume in 2024 as current market conditions are favorable to tenants. This indicates a potential rebound in demand, as the market strives to catch up with the robust deliveries of newly constructed industrial spaces.

CBRE analyzed “big-box” warehouses of 200,000 sq. ft. and larger because warehouses of that size are crucial for extensive national and international product distribution. Encompassing the United States, Mexico and Canada, the big-box report found that industrial facilities had higher taking rents than in years past. Rent growth remained robust at 15.9%, but down from 25.1% in 2022.

Of the leasing activity that took place, demand was driven primarily by a desire to boost supply chain resilience, increase access to growing population centers, modernize space to accommodate increased automation and support continued e-commerce growth.

To read the full report, click here.

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Commercial Real Estate

Gantry Secures $17M for Riverside Grocery Retail

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Loan Stabilizes Riverside Neighborhood Center Featuring Ralph’s, Wells Fargo Bank, and Mix of Dining, Service, and Retail Tenants; Lenders Continue to Target Grocery Retail Allocations

Gantry, the largest independent commercial mortgage banking firm in the U.S., has secured a $17 million permanent loan to refinance Magnolia Towne Center, a 133,000-square-foot grocery-anchored retail center offering 10-buildings located at 6033-6189 Magnolia Ave in the city of Riverside, Calif. The neighborhood center features a Ralph’s grocery store, Wells Fargo Bank, Restaurant, and professional services tenants. Ownership is currently in the process of leasing 27,000 square feet at the center, with retail specialists Strategic Real Estate Advisors (SRA) handling the assignment.

Gantry’s James Ruiz, Senior Director, with the firm’s Irvine production office secured the funding of behalf of the borrower, a private real estate investor. The 10-year, fixed rate, life company loan was provided by one of Gantry’s life company correspondents and features 30-year amortization and prepayment flexibility.

According to Gantry’s James Ruiz, “Neighborhood grocery-anchored retail space has remained a prioritized allocation for Gantry’s roster of life company correspondents and many other permanent debt capital sources. This is a well-managed property with experienced sponsorship that was facing a pending CMBS maturity while in the process of backfilling some space at the otherwise stabilized property. Conservative leverage, demonstrated performance, and professional management allowed Gantry to review this loan against several of our top lenders, ultimately landing on a fixed-rate permanent loan that met our client’s legacy investment goals. Notably, the borrower achieved an exceptionally low spread while successfully meeting its objective for cash out without a holdback, a testament to the strategic partnership between Gantry and our valued clients.”

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