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Commercial Real Estate Transactions

Wood Investments Companies Purchases Former Kmart Property to Develop 80,800 SF Grocery-Anchored Shopping Center in Big Bear Lake

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Wood Investments Companies, Inc., a fully-integrated commercial real estate investment company specializing in retail, announced today the acquisition of a former Kmart building on 7.49 acres in Big Bear Lake, California, Southern California’s popular mountain resort community and destination. Big Bear Lake is home to over three million annual visitors who come to enjoy fishing, snowboarding, skiing, hiking and mountain biking. Wood Investments plans to develop an 80,800-square-foot grocery-anchored shopping center.
Wood Investments has been looking for an investment property in Big Bear for close to four years with specific tenants in mind,” said Patrick Wood, CEO and president of Wood Investments Companies. “As soon as the former Kmart property became available, we took the opportunity. We are excited to be part of such a great community with such a great history and a great future and look forward to creating a shopping experience that visitors and the entire community can enjoy.”

The new development, Big Bear Lake Shopping Center, is located at 42126 Big Bear Blvd. at the southwest corner of Big Bear Blvd. and Fox Farm Road in San Bernardino County. Wood Investments purchased the property for $6.5 million in late December 2022, with plans to subdivide the former Kmart building into three individual anchor suites. The building will house a new Grocery Outlet (17,193 square feet), a soft goods retailer, which has signed a lease for 23,228 square feet, and a third tenant, which is currently in lease negotiations for approximately 25,000 square feet. Wood Investments expects to commence construction in the fourth quarter of 2023 and open in March 2024.

The former Kmart building was built in 1992 and has sat vacant since early 2021.
Big Bear Lake is located in the heart of Southern California in the San Bernardino National Forest, 100 miles northeast of Los Angeles and an easy drive from Phoenix and Las Vegas. Altitudes range from 6,750 to 9,000 feet and the valley enjoys 300+ days of sunshine each year.

The area is home to bald eagles, bears, mountain lions, bobcats, coyotes, deer and more, plus about 29 species of protected rare plants, some indigenous to the area. Big Bear Lake is a manmade, fresh-water lake seven miles long and a half-mile wide; maximum depth reaches 72 feet and the shoreline spans over 22 miles. Big Bear is home to one of the nation’s few solar observatories and alpine zoos for injured wildlife.

Big Bear specializes in outdoor recreation, like fishing, water sports, hiking, biking, horseback riding, and winter sports. A nine-hole golf course, seven public campgrounds, restaurants, entertainment and shopping offer an experience for everyone to enjoy. The Big Bear City Airport is open 24/7 and is equipped for night landings.
“Big Bear is a year-round destination with a high barrier of entry, which has been underserved,” noted Wood. “We look forward to the completion of the new Big Bear Lake Shopping Center in March 2024.”

Charley Simpson of Colliers International represented Wood Investments Companies in the sale transaction. Nick Wirick, Chris Beauchamp and Miranda Montgomery with Lee & Associates in Riverside are handling the leasing of Big Bear Lake Shopping Center.

According to Wood, Wood Investments Companies continues to look for well-located value-add development opportunities in the Western U.S. where the company can incorporate its design and tenant influence to create new grocery-anchored neighborhood shopping centers.

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

CBRE Negotiates $14 Million Sale of Ariana at El Paseo in Palm Desert

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The deal is one of the largest in Palm Desert over the last decade

CBRE arranged the $14 million sale ($222,222 price per unit) of 63-unit Ariana at El Paseo in Palm Desert, Calif., to Investment Concepts, Inc. CBRE’s Eric ChenKevin SinBlake TorgersonDean Zander and Stew Weston represented the seller, 45278 Deep Canyon Road, in the transaction.

“Our team successfully marketed this unpriced property to investors,” said Mr. Chen, executive vice president. “Our team generated multiple competitive offers resulting in the largest multifamily transaction in Palm Desert over the last eight years. The owner passed away last year, and her trustee was tasked with selling this asset. The owner has generously donated all proceeds to various charities.”

The boutique apartment homes are located at 45278 Deep Canyon Road and offer a mix of studio, one- and two-bedroom floorplans, averaging 865 sq. ft. Each unit features a fully equipped kitchen, vinyl plank flooring, oversized patios and balconies, central air and heating, and large closets. The community amenities include a resort-style pool, on-site laundry facilities, an outdoor lounge and fireplace area, a pet play area and BBQ stations.

“This immaculately maintained property is a generational quality asset in the growing Coachella Valley submarket. The Coachella Valley has seen some of the highest rent growth in all pockets of the Inland Empire in the past few years due to increased economic growth in the region. Multifamily fundamentals remain strong in the area with the restriction of supply coming into the market,” added Mr. Sin.

According to CBRE research, Coachella Valley has one of the lowest vacancy rates in the Inland Empire, at 4.3%, second only to Redlands. In the first quarter of the year, the submarket also saw a 1.9% year-over-year rent change.

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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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