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11/01/23
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A 21.9k sf, 100% occupied shop building at 10582 Foothill Boulevard in Rancho Cucamonga sold for $7.45 mil ($349/sf). The nine-tenant shop building sold at a 6.11% cap rate in an all-cash 1031 exchange transaction.
The building is ideally situated between Target and Hobby Lobby and is part of the 645k sf Terra Vista Town Center. Centrally located at the busy signalized intersection of Foothill Blvd and Haven Ave, the center has excellent visibility and unobstructed frontage with exposure to an average of 67,300 cars per day.
The regionally prominent Terra Vista Town Center is 99% leased and, in addition to Target and Hobby Lobby, is also home to Ross, Old Navy, Michaels, Home Goods, Esporta Fitness, Big 5 Sporting Goods, Five Below and over 40 other shops, services and dining spots. Originally developed by Lewis Retail Centers, the popular outdoor center features modern architecture and a pedestrian friendly layout.
Greg Bedell, CCIM, and Paul Su, exclusively with Progressive Real Estate Partners represented the seller, a private Michigan-based investor. Raymond Ho with GE Property repped the buyer, a private San Gabriel Valley-based investor.
Nine e-commerce resistant service-oriented tenants including multiple beauty service providers, a jeweler, escape room and a children’s indoor playground occupy the shop building. All leases are NNN with staggered lease expirations, embedded annual rent increases and below market rents providing the buyer a diverse income stream with upside potential by increasing rents to market rates over time.
According to CoStar, Rancho Cucamonga enjoys a low retail vacancy rate of only 4.16%, well below the overall Inland Empire rate of 5.85% and below the LA County rate of 5.3%. Terra Vista Town Center also boasts impressive demographics with over 234,000 people residing within a 10-minute drive and an average household income of nearly $111,000.
“With higher construction costs and rising interest rates continuing to impede the development of new retail space, the supply of existing shop space in the Inland Empire remains constrained,” Bedell commented. “As a result, owners of quality retail centers are benefitting from rising rental rates and stronger tenants. We expect this trend to continue.”
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