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7/30/15
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In a recent NoCal retail investment buy, Hovercraft LLC acquired a 119k sf, single-tenant NNN-asset in the Monterey County city of Seaside for $16 mil ($134/sf). It was sold by was sold by New York Life Real Estate Investors.
The property, located at 1590 Canyon Del Rey Blvd, is occupied by Home Depot, who assumed the lease in the early 2000s and immediately exercised all outstanding options, extending its term through 2032. The asset parallels Highway 1 and has excellent freeway visibility. Other tenants in the center include Smart & Final, Staples and McDonalds.
This opportunity attracted considerable interest from local developers and investors, private high-net-worth individuals, east and west coast family offices, foreign investors and private real estate companies. The transaction closed with a cap rate in the three - four percent range, the lowest cap rate paid for a Home Depot nationally, we’re told.
“The seller, who acquired the asset in the 1990s, took advantage of the significant demand for quality single-tenant NNN assets and also leveraged the favorable characteristics of the remaining lease term to generate more than 25 offers on the property,” stated Savills Studley’s Kyle Miller, who represented the seller, along with colleague Bill Bauman.
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