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5/11/16
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Challenger Business Park, a 24.7k sf, multi-tenant medical and professional office campus in Palmdale, has traded for $4.78 mil ($194/sf). The property is located at 450-460 W Palmdale Blvd, at the western end of the city.
The seller, Westlake Village-based Martin Properties, developed the office campus on land subject to a long-term ground lease that runs through 2061 with multiple options. Construction was completed in 2009.
The main tenant at the property is The Torres Martinez Desert Cahuilla Indian Tribe, which occupies 13.2k sf for its social services administrative offices. Other tenants include Progressive Physical Therapy Inc, which has one of its four locations at Challenger.
The property is situated within walking distance of Palmdale Regional Medical Center with 157 licensed acute care beds, and a total of 3 msf of retail including the Antelope Valley Mall is located within a mile.
The buyer, Valerio Court LLC, acquired the property in a 1031 Exchange transaction. John Battle, SIOR, with Lee & Associates-LA North/Ventura, represented the seller, who plans to redeploy proceeds in other investments closer to its headquarters location.
“The ground lease was very attractive to potential buyers because it allowed for a very high cash-on-cash return of over 15 percent,” said Battle. “Additionally, the existing tenants are stable, long term occupants with triple net or modified gross leases so the operating costs are lower than they would be for typical office properties with full service gross leases.”
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