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10/03/19
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An investor has completed a strategic 1031 exchange of four properties with a total transaction value of $26.9 mil. The complex process involved the sale of a three-property, multi-family/mobile-home portfolio that included 66 apartment units and 171 mobile-home spaces in various SoCal locations, and then the trade into Madison Avenue Plaza, a 70.7k sf office property in Temecula.
Madison Avenue Plaza, Temecula |
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The investor sold a three-property multi-family/mobile-home park portfolio for a total of $11.8 mil to three separate private buyers. The portfolio properties in the sale included:
• Wagner Mobile Home and RV Park, a well-maintained 171-space senior community situated on nearly 24 acres at 18801 Roberts Rd in Desert Hot Springs
• Aurora Apartments, a 49-unit apartment community located at 480 Aurora Drive in El Centro
• Brawley Apartments, a 17-unit apartment community located at 231 Canal Rd in Brawley
The upleg in the 1031 exchange was Madison Avenue Plaza which was purchased for $15.1 mil. Built in 2003, Madison Avenue Plaza is located at 27270 and 27290 Madison Ave in Temecula, with additional parking located at 41427 Sanborn Ave. The two-building, three-story property is situated on 4.81 acres adjacent to, and highly visible from, Interstate 15, and is approximately 98% occupied by seven tenants. The 27270 Madison building is fully occupied by San Joaquin Valley College, while the 27290 Madison building includes a majority of financial and medical-oriented tenants.
Madison Avenue Plaza provides easy access to the 15 and 215 freeways as well as proximity to walkable amenities, including Starbucks, Subway, Filpipi’s Pizza Grotto, Annie’s Diner, and California Bank and Trust, among others. It is also situated less than two miles from Old Town Temecula and its community events, shopping and high-end restaurants, and is approximately one mile from the Promenade Mall, a regional mall spanning more than 2.2 msf of retail locations and restaurants.
Peter Hauser, Matt Hauser and Masa Ito with Avison Young represented the seller of the portfolio, a San Diego-based private investor. Matt Shaw, Corey Martin and Stan Nowak, also with Avison Young, represented the seller of Madison Plaza, an affiliate of Providence Capital Group Inc, which is based in Encinitas, as well as the buyer in the upleg of the 1031 exchange.
The exchange investor client had identified Madison Avenue Plaza as a desired upleg and was looking to sell its management-intensive multi-family assets and trade into a single, stabilized investment property, noted Hauser. The Avison Young team was able to close all of the transactions within the tight timeframe required by 1031 exchange laws.
Commenting on the Madison Avenue Plaza buy, Shaw said, “This high-quality office asset offered an investor a property with strong occupancy and cash flow. Additionally, its prominent location in Temecula – an affluent Riverside County location that continues to see job and population growth – provides a generational type of asset that is anticipated to appreciate in value as rents continue to rise due to thriving tenant demand.”
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