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11/08/23
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A new construction, 8.4k sf multi-tenant retail pad at Monterey Crossing, a newly developed shopping center at the Interstate 10 and Monterey Ave interchange in Palm Desert, sold for $6.34 mil ($755/sf).
Constructed in 2022, the 100%-leased, pad building is located sits on 1.18 acres at 3120 Dinah Shore Dr, at the hard corner signalized intersection of Monterey Ave and Dinah Shore Dr. The building is occupied by a mix of internet-resistant tenants that include Jersey Mike’s Subs, Nekter Juice Bar, Roll-Em-Up Taquitos, Keith Alexander, DDS, and Mathnasium.
National tenants located at the intersection of Monterey Ave and I-10 include Costco, Home Depot, Kohl’s, Sam’s Club, Walmart Supercenter, 99 Cents Only, Ashley HomeStore, JOANN Fabrics and Crafts, PetSmart and Regal Cinemas.
This transaction marks the fifth retail pad building sold at Monterey Crossing, totaling a combined 25.4k sf and approximately $27 mil. Bill Asher and Jeff Lefko with Hanley Investment Group Real Estate Advisors represented the developer and seller, Fountainhead Development of Newport Beach in all five retail investment transactions. The buyer, a private investor from Los Angeles, was repped by Yoram Katz of Peak Commercial in Woodland Hills.
“We successfully closed escrow with the buyer securing new financing and closing escrow in the final days of their 1031 exchange period, in one of the more challenging capital market environments we’ve experienced in over a decade,” said Asher. “Two of the five tenants were not open for business at the close of escrow, including one tenant not yet paying rent. We structured a holdback at closing to cover any rent not collected from close of escrow until the tenant’s formal rent commencement date.”
Previous sales at Monterey Crossing included two brand new, single-tenant ground leased pads to Chick-fil-A Drive-Thru and Quick Quack Car Wash, a brand new, single-tenant net-leased investment The Habit Burger Grill with a drive-thru, along with a two-tenant pad building occupied by AT&T and Spectrum. All four properties were sold to four separate buyers at record-low cap rates.
Monterey Crossing is strategically located adjacent to Interstate 10 freeway, one of the most centrally located and heavily visited interchanges (110,000 cars per day) in the Desert Cities area of Southern California and a primary east/west arterial connecting to Los Angeles to San Bernardino County, Riverside County and Phoenix, AZ.
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