Retail Buyers Pay Nearly $17M for 55,000 SF in Chino Hills, elsewhere.

Three buyers, all from Los Angeles, have acquired retail centers in Riverside and Victorville, CA in the Inland Empire, plus a center in Mesa, AZ, according to Hanley Investment Group Real Estate Advisors. Hanley, which represented the sellers in all three deals, reports that the properties total more than 55,000 sf and sold for an aggregate of more than $16.5 million.

In the Riverside transaction, Eric L. Werner of Hanley comments that the deal “was a challenging sale given the fact Coffee Bean & Tea Leaf announced during escrow that they would not be opening their store at this location.” Werner, who represented the seller of the 9,510-sf strip center at 1242 University Ave., says that even with the Coffee Bean & Tea Leaf situation, “The buyer liked the strength of the location, which is adjacent to UC Riverside.” The closing cap rate of 5.68% represents a near record for similar type product in Riverside County, he adds.

YKS Village LLC acquired the center, which is called University Village West, from 951 Dudes LLC of Irvine for $5.75 million. The property, occupied by seven tenants built in 2007, was 100% occupied at the time of sale. Coffee Bean & Tea Leaf was dark at the close of escrow and was committed to subleasing its space. The buyer was represented by Robert Lee of Coldwell Banker-Metro Realty in La Crescenta, CA.

In Victorville, Hanley's Cameron Rafati reports that the $3.85 million sale of a 5,939-sf multi-tenant strip center at 14213 7th St. required a 60% down payment and the assumption of an existing loan. Rafati, an associate at Hanley, comments that, “We overcame a tenant vacancy during escrow to help satisfy a 1033 exchange for the buyer and establish a record-breaking cap rate for a multi-tenant strip center in the area.”

Rafati and Jeremy S. McChesney of Hanley Investment Group represented seller MJK/7th and Greentree Real Estate Holding Co. LLC of Deerfield, IL. The five-tenant property, called Starbucks Retail Center, sold for a 5.8% cap rate.

Situated at the signalized intersection of Greentree Boulevard and Seventh Street, the center is leased to five tenants, was built in 2004 and was 100% occupied at the time of sale. The buyer, Helm LLC, was represented by Bill Bird of SC Properties, based in Chino Hills, CA.

The details of the recent sales illustrate that, “Transactions have become more challenging in recent months due to increased tenant vacancies at properties, especially during escrow,” observes Edward B. Hanley, president of Hanley Investment Group. However, he adds, “Despite an economic downturn and continued capital market challenges, we continue to close deals in today’s market.” Retail centers “remain one of the most viable investment alternatives in real estate and we are working with a significant pool of buyers with cash that are ready to purchase,” he adds.

Hanley and Carlos J. Lopez of Hanley Investment Group represented the seller in the Arizona deal, which was the sale of a 39,618-sf multi-tenant center for more than $6.97 million, at a 7.2% cap rate.

Known as Tableland Village II, the property is located at 1343 S. Gilbert Rd.d in Mesa, just south of the signalized intersection of Gilbert Road and Southern Avenue. Situated on 3.33 acres, Tableland Village II is leaseed to 12 tenants, was built in 1986 and was 93% occupied at the time of sale.

Lopez describes the property as a unique mix of office, medical and retail tenants that has historically been more than 90% occupied. The buyer was Cathedral Ocotillo LTD, an all-cash 1031 exchange buyer, which acquired the property from Tableland II LLC of Santa Ana, CA. The buyer was represented by Ron M. Pelleg of Los Angeles.