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7/06/23
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Two new construction single-tenant net-leased retail investments were acquired in separate deals with two different buyers as part of a break-up sale strategy at a new retail development in Southern California’s Imperial Valley. The two buildings, which total 7.5k sf and are leased by Starbucks Drive-Thru and the United States Postal Office, sold for a combined total of $5.81 mil.
The new retail development is located across the street from Frank Wright Middle School with 1,034 students. Nearby tenants include Costco, Lowe’s, Target, Walmart, 99 Cents Only, ALDI, AutoZone, dd’s Discounts, Dollar Tree, Food 4 Less, Harbor Freight Tools, PetSmart, Planet Fitness, Ross Dress for Less, and Tractor Supply. The properties benefit from its location on State Highway 86/Imperial Ave, a major highway connecting Interstate 8 to San Diego and Interstate 10 to Los Angeles.
Bill Asher and Jeff Lefko with Hanley Investment Group Real Estate Advisors represented the seller and developer, 5th Street Development LLC, based in San Diego, in both transactions.
In one of the transactions, an OC-based private investor paid $2.88 mil for a single-tenant property occupied by a Starbucks Drive-Thru built in 2022 on 0.77 acres in the city of Imperial. The new 2.1k sf ($1,371/sf) building is located at 802 North Imperial Ave at the hard corner, signalized intersection of State Highway 86 (North Imperial Ave) and 15th St. Imperial Ave is the primary retail corridor in the Imperial Valley.
Starbucks has a new 10-year lease. The buyer repped themselves in the deal.
In the other deal, a private partnership from Indianapolis, IN paid $2.93 mil for a single-tenant property occupied by the United States Postal Service at 820 North Imperial Ave, also in Imperial. Built in 2021 on 1.49 acres, the 5.4k sf building is situated between McDonald’s and a soon-to-be-built Quick Quack Car Wash. USPS has a new 10-year lease with 3% annual increases and two five-year options with annual increases.
The buyer was an all-cash 1031 exchange buyer who owned a portfolio of post office properties across the U.S. This buyer was self-represented as well.
The properties serve the Imperial Valley and Mexicali (Mexico), creating a combined primary customer base of approximately 1.5 million people. According to Asher, the Imperial Valley is one of the most productive agricultural regions in the world; the total dollar value of the region’s agriculture production increased 51% over the last decade to $2.06 billion annually, outpacing inflation by over 31%.
Starbucks Drive-Thru and USPS are located approximately 15 miles north of two Calexico/Mexicali border crossings, benefiting from nearly 20 million people crossing at these ports annually. There are 190,000 people in Imperial County and 1.3 million people in Mexicali. The average household income within a three-mile radius of the property is $80,615; within a five-mile radius, there are 48,915 people.
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