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9/02/16
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A 9.2k sf, multi-tenant retail pad building in Upland sold for $3.9 mil, or $424/sf, in a deal that had a cap rate of 5.48%, said to be a record low cap rate for a multi-tenant pad over $3.5 mil in the trade area. The building is part of a neighborhood shopping center anchored by Smart & Final Extra!
Built in 1997, the multi-tenant retail building is situated on .49 acres at 1042 North Mountain Rd, the northeast corner of Foothill Blvd and Mountain Rd. The five-tenant property was 100% occupied at the time of the sale. Tenants included The UPS Store, The Spot Café, Mountain View Dental and We Talk Pets.
Bill Asher and Pat Kent with Hanley Investment Group Real Estate Advisors represented the seller, CME Mountain Avenue LLC, based in San Diego. The buyer, a local investment partnership, was repped by Jin Hwang of EJ Realty & Investment in Torrance.
“The market for shadow-anchored multi-tenant retail in southern California remains strong,” said Asher. “It’s become a very good alternative for passive investors looking for a better yield than the single-tenant retail investment sector where cap rates in southern California have consistently transitioned in the last year into the 4% cap range for those assets leased to national credit tenants.”
"There was no shortage of interest in the property,” said Kent. “We procured 10 competitive offers and ultimately procured a qualified all-cash 1031 exchange buyer. We structured an expedited closing with a nine-day escrow with a seven-day due diligence period that met both the buyer and seller’s investment objectives.”
Asher notes that the Smart & Final Extra! was a significant driver to the sale along with the desirable Foothill Boulevard location. "The amount of daily customer traffic generated by Smart & Final along with being situated at one of the most highly-travelled intersections in Upland, were highly attractive selling points to the long-term stability of the location and the main reason the property was pursued by a large group of prospective buyers.”
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