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10/12/20
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An affiliate of Balboa Retail Partners purchased Gateway Plaza, a 119.4k sf, neighborhood shopping center in the CA coastal city of Santa Cruz. The price was not disclosed.
Gateway Plaza is home to several nationally recognized tenants such as Ross, Office Max, Cost Plus and PetSmart. The property features strong visibility as it sits along River Street and is adjacent to the entrance of Highway 1. It also serves a wide customer base as it is strategically located near multiple residential neighborhoods and the UC Santa Cruz main campus. At the time of sale, the property was 98% leased to a strong lineup of daily needs and restaurant tenants.
Nicholas Bicardo, Edmund Najera and John McKenna with Newmark Knight Frank represented the private seller in the transaction.
“Sold for the first time since being developed in 1998, Gateway Plaza is one of just a few retail assets in Santa Cruz, thereby making the barriers to entry extremely high.” said Bicardo, “This makes it exceedingly difficult to acquire scale in this market, while at the same time making it equally difficult for retailers to find any availability. Gateway Plaza is the perfect example of quality real estate with strong long-term value appreciation.”
The City of Santa Cruz maintains high physical barriers to entry with mountains to the north and east and the Pacific Ocean to the west. This limited developable area helps to create tight market fundamentals including a 1.5% vacancy rate and only two, 18k sf - to 30k sf box availabilities within a 20-mile radius, according to NKF Research.
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