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5/12/23
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An L.A.-based private investor paid $6 mil for South Sierra Plaza, a 17.3k sf ($348/sf), unanchored strip center in Fontana. The property, located at 10660 South Sierra Ave, was sold by the center’s original developer. The 12-unit center traded at a 6.6% cap rate based on 93% occupancy.
South Sierra Plaza is less than a ½ mile from the heavily traveled 1-10 freeway and is located along a major Fontana retail corridor with numerous national retailers including Target, Ross, 24 Hr. Fitness, TJ Maxx and many others surrounding the property.
Built in 2006, the attractive and well-maintained property is home to a variety of e-commerce resistant services and eateries that cater to the local community including a dentist, nail salon, Armed Forces career center, staffing agency, Japanese eatery and Peruvian restaurant. Comprised of smaller spaces, no single tenant occupies more than 20% of the center providing the buyer a diverse income stream and tenant mix.
South Sierra Plaza features highly visible pylon signage and enjoys outstanding visibility and unobstructed frontage on Sierra Avenue. Furthermore, the Social Security Administration office is directly adjacent to the property attracting a steady flow of weekday traffic and there are several new development projects in close proximity including two new hotels and a satellite college campus. Approximately 325,000 people with an average household income of $84,640 live within a 5-mile radius.
Brad Umansky and Lance Mordachini with Progressive Real Estate Partners represented the seller in the deal. In addition to brokering the sale, Progressive brokers Paul Galmarini and Albert Lopez handled the lease-up of the center maximizing the property value prior to listing. Cameron Diab of D & Z Properties repped the buyer in the transaction.
Umansky noted, “This transaction benefitted from an assumable loan that was at a 5% interest rate for a portion of the purchase price. Loan assumption is a relatively new financing trend since existing loans were more of a burden for many years, but, in the current interest rate environment, the ability to assume loans that were priced from 2015 to 2021 may facilitate sales that might not have been achievable otherwise.”
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