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6/02/16
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Seven Trees Shopping Center, a 150.3k sf Target-anchored shopping center in San Bernardino, sold for $8.57 mil, or $57/sf. The buyer was Westland Real Estate Group, out of Long Beach.
Seven Trees Shopping Center is located on 13.79 acres at the northwest corner of E. Highland Ave and Sterling Ave. The property, which was built in 1979-1986, was 85% occupied at the time of the sale.
Ed Hanley and Senior Vice President Kevin Fryman of Hanley Investment Group Real Estate Advisors represented the buyer in the transaction. According to Hanley, approximately 93% of Seven Trees Shopping Center’s current tenancy is leased to national or regional chains including Target, Baskin Robbins, County of San Bernardino, Payless ShoeSource, Sally Beauty Supply, and Waba Grill, which recently signed a 10-year lease.
“The property benefits from historically stable cash flow with 91% of the tenancy operating at the center since at least 2002,” said Fryman. “Target has been operating at the center since 1986.”
“Another benefit of the property is that each building in the center is separately parceled, Target, four pad buildings, and a 23.5k sf strip center,” said Hanley. “This allows the buyer the ability to sell the Target and four pad buildings as single-tenant investments, which are selling at historically low cap rates due to today’s high buyer demand.”
Fryman reports that the property sold at a price that was far below replacement cost. “At $57 per square foot, the buyer was willing to accept the risk of finding a replacement tenant for the Target building, if Target decides to leave the shopping center, and lease up the remaining 15% of the shopping center including a separately parceled 8.9k sf freestanding pad building,” said Fryman.
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