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SRS’ National Net Lease Group Announces $6 Million Sale of a Newly Developed Single-Tenant Property Occupied by Grocery Outlet in Norco, CA

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Commercial Real Estate Transaction Alert

SRS Real Estate Partners’ National Net Lease Group has announced the $6 million sale of a new construction, 18,000-square-foot, single-tenant property occupied by Grocery Outlet at 1428 Sixth Street in Norco, CA.

SRS National Net Lease Group’s Managing Principals Matthew Mousavi and Patrick Luther represented the seller, a local developer. The buyer, a family partnership, was represented by Mark Bitterlin of Trust Real Estate Services.

Grocery Outlet opened its doors in May 2020 and is situated on 1.72 acres. It is the anchor tenant to the new Norco Gateway Shopping Center. Other tenants at the center include Taco Bell and 6,000 sf of future retail shops. Other nearby retailers include Rite Aid, Stater Bros, Boot Barn, 99 Cents Store, and Dollar Tree, among others.

“On behalf of the seller/developer, we went to market on this asset as a pre-sale opportunity during the COVID-19 crisis,” said Mousavi. “We are also in escrow on the adjacent Taco Bell property as part of a break-up strategy to maximize value for our client. The cap rate on the Taco Bell is in the low 3 percent range.”

“Discount, essential needs retailers are highly sought after by investors as they provide stability even during economic uncertainty,” said Luther. “This high-quality, newly constructed property offered the buyer a 10-year corporate guaranteed lease in a dense, infill area with high barriers to entry for development.”

“Despite being in the middle of the pandemic and county-wide closures during the marketing process, we were able to generate significant offer activity and manage through the financing process,” added Mousavi. “We continue to experience strong investor demand for essential use, net lease assets, particularly for grocery stores.” 

The property has a population of more than 284,000 residents and 84,000 employees within a five-mile radius. It is also adjacent to and highly visible from the 15 freeway.

SRS’ National Net Lease Group has continued its explosive growth in the past year, and plans to continue expansion of their teams across the country throughout the remainder of 2020. SRS’ National Net Lease Group and the western region of SRS’ Investment Properties Group successfully completed more than 300 sales to date in 2020.  Of those transactions SRS’ National Net Lease Group (NNLG) has closed 223 transactions since the COVID-19 crisis began. These transactions alone are valued at more than $965 million. Additionally, the group has more than 500 individual assets under LOI or in escrow and $1.8 billion in assets currently listed for sale.

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

Hanley Investment Group Completes Sale of Chipotle Drive-Thru Anchored Pad in Palm Desert, Calif., for $3.86 Million

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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 fully occupied, multi-tenant retail pad property in Palm Desert, California. The property is anchored by a new Chipotle Mexican Grill with a drive-thru “Chipotlane” near the Interstate 10 freeway Washington Street on/off ramp. This transaction closed at $3.86 million, marking the 17th Chipotle property sold by Hanley Investment Group in the last 24 months.

Hanley Investment Group’s Executive Vice Presidents Bill Asher and Jeff Lefko represented the seller, a private investor based in Los Angeles. The buyer, a private 1031 exchange investor from San Diego, was represented by Omar Hussein of Beacon Realty Advisors in Del Mar, California.

“We generated multiple qualified offers and created a competitive bidding environment to achieve maximum market pricing,” said Asher. “We procured an all-cash 1031 exchange buyer and negotiated a 21-day due diligence period and a timely closing to help accommodate the buyer’s exchange requirement.”

Built in 2008, the 8,500-square-foot, four-tenant retail pad sits on 1.01 acres at 39575 Washington Street in the heart of Coachella Valley. Chipotle Mexican Grill occupies approximately 40% of the building with a new 10-year triple-net corporate lease (NYSE: CMG). Other tenants include Cornerstone Pharmacy, Luxury Nails & Spa, and Keller Williams Realty Coachella Valley | Jelmberg Team.

The property is strategically located at a signalized intersection on Washington Street, a major north/south corridor in the Coachella Valley (46,350 cars per day). It is ideally positioned one block from the Interstate 10 entrance/exit for Washington Boulevard (107,750 cars per day). Interstate 10 connects Los Angeles to San Bernardino County, Riverside County, and Phoenix, Arizona. The Chipotle-anchored property is also directly across from Sun City Palm Desert, a 1,600-acre gated community with over 5,000 homes and more than 9,000 residents.

Surrounding retailers include Stater Bros., EOS Fitness, Bank of America, DaVita Dialysis, Del Taco, McDonald’s, Starbucks, Taco Bell, and Walgreens. The property is less than 2.5 miles from the new Acrisure Arena, an 11,000-seat indoor arena that opened in December 2022 and is home to an NHL minor league ice hockey team.

Palm Desert is the geographic center of the Coachella Valley, a rapidly growing region in Southern California. The average household income within a three-mile radius is over $110,000. The population within a three-mile radius of the investment property has increased by 65% between 2000 and 2021. Within one mile, the number of households has increased by 44% during the same period.

The Coachella Valley attracts over three million visitors each year and hosts major events such as the Coachella Valley Music & Arts Festival (the world’s largest music festival, attracting over 250,000 visitors), the Stagecoach Festival (the second largest country music festival with over 85,000 visitors), and the Riverside County Fair & National Date Festival (attracting 315,000 visitors). The region is also home to four casinos and more than 130 golf courses.

Asher adds, “Chipotle is one of the more sought-after QSR drive-thru tenants in the marketplace right now, and it showed based on the high-interest level we received on the property. The sale of the Chipotle-anchored pad building in Palm Desert demonstrates there is still an active buyer pool for top-tier multi-tenant retail pad investments in today’s market.”

Hanley Investment Group has sold $1.8 billion in retail properties in the Inland Empire, including $470 million in volume in the last 48 months.

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CBRE’s NRP – Newport Beach Retail Investment Team Closes 1,000th Retail Investment Transaction, Launches Retail Private Capital Team

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CBRE’s NRP – Newport Beach Retail Investment Team announced the completion of its 1,000th retail investment sale transaction with the closing of Komar Desert Center in La Quinta, California. Komar Desert Center consists of multiple pad retail buildings shadow-anchored by the only Costco in the Desert. The property sold for $26.4 million to a private capital investor, completing a 1031 exchange.

Led by Phil Voorhees, the Newport Beach, California team, successfully closed 1,000 retail investment sale transactions, including 359 anchored shopping centers, 267 strip shopping centers, 356 single-tenant-net-leased (STNL) investments, and a variety of other retail properties, totaling nearly $14.8 billion in value and encompassing over 75 million square feet throughout the west. Since 2012, the team achieved an average of 97% of the list price on 581 closed transactions, amounting to nearly $8.8 billion. The team consists of 19 members and leverages CBRE’s extensive resources to deliver exceptional results for institutional and private clients.

“This is a day that is – at the same time – hard to imagine and inevitable,” said team leader Phil Voorhees, Vice Chairman at CBRE. “When I arrived at CBRE in 2001, Todd Goodman (retired) and Preston Fetrow already managed one of the few retail investment teams in the country focused solely on retail investments. Now we have closed the 1,000th retail investment sale transaction and expanded the team’s footprint to include strip centers and STNL investments. The team’s remarkable track record of accuracy and consistency over more than two decades is extremely gratifying.”

With its 1,000th successful transaction completed, Voorhees is stepping down from CBRE’s National Retail Partners platform to focus on private capital assets and clients, and personal investments. Voorhees and his longtime partner, John Read, will co-lead the private capital team and expand throughout the region.

Jimmy Slusher will assume leadership of the Newport Beach National Retail Partners team, concentrating on institutional clients and premier retail assets. The Newport Beach NRP team is part of CBRE’s National Retail Partners platform, a national group covering every region around the country advising real estate investment trusts (REITs), operators, developers and pension fund clients, the institutional cohort targeting larger format retail investments.

“In hindsight, the team laid a foundation of success, one successfully closed transaction at a time,” noted Slusher, regarding the 1,000th team transaction. “We’re grateful for many repeat clients and working at a great company that has supported the team over the years.”

Read added, “Variety is the spice of life, and that could not ring truer than with the variety of clients and retail investments our team represented over many years. While our 1,000th sale is a significant milestone, we approach every assignment and transaction with the same level of passion and process, regardless of its size. We are grateful for our clients’ trust in our ability to execute and represent their best interests, which has been instrumental in our success.”

Going forward, Slusher will lead National Retail Partner’s efforts in the region while Voorhees and Read will handle private client opportunities. The two separate teams will be positioned to service a wide variety of retail investment matters across the region. Long recognized as industry-leading retail investment experts, the teams continue to specialize in portfolio sales, anchored centers, strip centers, single-tenant assets, specialty retail projects, REO and Receivership assets and parcelized disposition strategy opportunities. Based in Orange County, California, the teams consist of specialists with institutional and private client relationships that leverage institutional quality knowledge and service across unparalleled access to private capital investors and the brokers who represent them, domestically and around the world.

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CBRE Completes $6.3 Million Sale of 25-Unit Multifamily Community in Fontana, California to Private Local Buyer

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CBRE announced the sale of a 25-unit multifamily community in Fontana, California to a local private investor for $6.3 million.

Eric Chen, Blake Torgerson and Hunter Wetton of CBRE represented both the private seller and private buyer in the transaction.

Located at 8919 Mango Ave. in Fontana, the property, built in 1973, offers a mix of one-bedroom, two-bedroom (townhouse-style), and three-bedroom floorplans with an average unit size of 787 square feet. Units feature high speed internet access, air conditioning and heating, and kitchen appliances. Property amenities include on-site laundry, carport and surface parking, secure entry gate and lush landscaping.

“This 25-unit property is a quality asset with substantial value-add upside potential in one of the best performing cities of the Inland Empire,” said Torgerson. “The property has historically performed well and is poised for future rent growth as the new owner plans to strategically renovate the interior and exterior of the property.”

He added, “This was a transaction in which our team negotiated seller financing, allowing the seller to achieve their target pricing while simultaneously enabling the buyer to immediately cash flow.”

The community is walking distance to Veterans Park, Chaffey College Fontana Campus and various restaurant options. It is also near Kaiser Hospital Fontana, the Fontana Metrolink Transit Station, retailers and Interstate 10.

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