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August 9, 2020
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Coastal NoCal Power Center Sells for $45 Mil


The Dunes in Marina, a 233.9k sf, power center in the Monterey Bay area along the NoCal coast, was acquired by a private investor for $45 mil ($192/sf). It was sold by Shea Properties, an Orange County-based fully diversified real estate company.

Built in 2007, The Dunes is located on 19.3 acres at 101-145 General Stilwell Dr in the city of Marina. The asset is 100% leased to national and regional credit tenants including, Best Buy, Old Navy, Kohl’s, Bed Bath & Beyond, Michaels, Party City, REI, among others.

Kirk Brummer, Megan Wood, James Tyrrell, Jimmy Slusher, Preston Fetrow and Philip D. Voorhees with CBRE’s National Retail Partners-West team represented Shea Properties in the deal. The buyer purchased the asset as an addition to its portfolio.

“We commenced marketing at the end of 2017, in a market that was reacting to all the media negativity about retail closings and had consequently discounted power centers” commented Fetrow, who pointed out that the retail tide turned in 2017, despite bankruptcies by Sears, Toys R Us, and Aaron Brothers.

“Cap rates on better quality power centers seem to be contracting after moving very wide in 2018,” said Voorhees. “High image, institutional quality centers in coastal markets like The Dunes make great sense in terms of leveraged yield, with a cap rate to 10-Year Treasury Yield spread of more than 400 basis points. A portfolio of similar assets would produce tremendous leveraged cash-on-cash returns.”

According to Tyrrell, CBRE’s marketing efforts produced more than 460 confidentiality agreement/offering memoranda distributed and through the team’s “managed bid” offer process, generated eight offers to purchase the property. The purchase price exceeded CBRE’s pricing guidance to the ownership.

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