|
|
1/04/17
|
In a recent SoCal retail buy, a private investor purchased Valencia Town Center Plaza, a 26.2k sf strip center located at 24510 Town Center Dr in the Santa Clarita submarket of Los Angeles, for $9.8 mil ($374/sf). The asset was sold by Trion Properties, who had acquired the property in October 2013 at a well-below replacement cost of $6.8 mil, and then repositioned it.
“We recognized the potential of this asset early on, and successfully executed our value-add strategy to generate significant returns on our investment,” says Max Sharkansky, Managing Partner of Trion Properties. “When we acquired this property three years ago, the occupancy had fallen below 50 percent, presenting an opportunity for us to increase net operating income through aggressive leasing and cosmetic upgrades. We brought the asset to nearly full occupancy and sold it at a premium price, achieving our targeted returns within a short-term hold period.”
Trion had purchased the property at a time when the Valencia retail market was still recovering from the economic crisis. During ownership, Trion more than doubled the asset’s occupancy and repositioned the retail storefront by attracting desirable tenants, implementing property-level renovations, and enhancing the overall curb appeal of the property.
“Retail in Santa Clarita is experiencing a tremendous amount of absorption relative to the amount of product being delivered to the market,” continues Sharkansky. “Annual net absorption for retail is approximately 110k sf, while new deliveries to the market are at a low 10k sf, resulting in a drop in vacancy to a historic low of 5.2 percent. Based on these strong fundamentals, we recognized that now was the most opportune time to sell this asset.”
Sharkansky notes that this disposition is well-aligned with the firm’s strategy of shifting its focus to value-add multifamily investments in primary markets along the west coast.
“Since acquiring this asset in 2013, we have shifted our focus away from retail and concentrated our investment activity in value-add multifamily,” explains Sharkansky. “This is where we see the most long-term value. Multifamily market fundamentals remain strong, with low vacancy rates and steady rent growth fueling investor demand. In addition, the demand for rental living remains strong as there continues to be a delay in home ownership throughout the U.S., making multifamily a strong asset class for investments.”
The firm’s investment strategy is to acquire and reposition distressed multifamily assets in four core markets along the west coast, including the Bay Area, Los Angeles, San Diego, and Portland, Oregon.
Earlier this year, the firm launched its debut fund, a niche private equity vehicle targeting $30 mil in equity commitments with $100 mil in buying power to strategically invest in the acquisition and renovation of undervalued multifamily assets in these core markets.
Joshua Levy and Matthew Dobson of Arbor Realty Capital Advisors represented both parties in the transaction.
|
|
 Return to the Archive page
|
|
|
|
|
Printer-friendly Version
Email an Associate
