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12/05/18
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College Square, a 97% occupied, 126.1k sf community shopping center in Stockton, was acquired by a SoCal-based 1031 exchange investor for $20 mil ($158/sf). The center is anchored by Hobby Lobby and Planet Fitness with other national brands, including freestanding buildings occupied by Wienerschnitzel and Outback Steakhouse as well as a diverse tenant mix of daily services and necessity-based retailers.
Built in 1976 with its most recent renovation in 2012, College Square is situated on 11.96 acres at 4756 Pershing Ave, at the busy intersection of March Lane and Pershing Ave, which sees more than 68,000 vehicles daily. The property is next to Target and is also near Sherwood Mall, a 525k sf mall anchored by Macy’s, Best Buy and Petco. It is also adjacent to San Joaquin Delta College and is in a dense infill area with a population of more than 305,000 people within a five-mile radius.
SRS’ Investment Properties Group Senior Vice President Chris Tramontano, Vice President John Redfield and Executive Vice President Tom Power represented the seller, a Northern California-based private partnership. The buyer was self-represented. Additionally, Ben Townsend and Matt Marlin of SRS’ Debt & Equity team structured a high leverage, non-recourse loan with a favorable reserve structure that allowed the new ownership to receive a cash-on-cash return of approximately 10%.
“It was crucial that we rebrand the asset and focus on its intrinsic value at this location, strong anchors, and below market rents to appeal to potential buyers,” Redfield commented about SRS’ marketing of the property. “Stability of cash flow with near and long-term upside were some of the key factors that helped us bring significant interest from the market, drawing from our strong investor database to create a new buyer pool.”
The City of Stockton is the 13th largest city in California and has a low retail vacancy rate at approximately 4%. The city is proximate to San Francisco and Silicon Valley and provides an excellent highway system that connects it to all major California markets.
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