Faris Lee Investments Completes $6.75 Million Sale Of Magnolia Village Plaza In Riverside, California
Riverside, CA – Faris Lee Investments, the nation’s largest retail-specialized investment sales and advisory team, has completed the $6.75 million sale of Magnolia Village Plaza, a 38,060-square-foot retail center in Riverside, Calif. The property is located at 10901 – 10995 Magnolia Ave. and includes a newly renovated freestanding Taco Bell with drive-thru, two retail pads and in-line shops anchored by Kaiser Permanente. The property is situated near the 91 Freeway just east of the busy intersection of Magnolia and La Sierra, across from the Riverside Regional Kaiser Permanente Hospital.
Nick Coo, director with Faris Lee Investments represented the seller, B U Management, a private investor from Southern California. The buyer was Newell Owenby Trust from Southern California and was represented by Reza Kassrian of Pars Global. The property closed at a 7.1 percent cap rate which is the lowest cap rate for a retail strip center sold in the City of Riverside over the last 18 months according to Costar.
Faris Lee identified the buyer through its proprietary database of 1031 and 1033 buyers. From their research, Faris Lee discovered that Newell Owenby Trust had recently sold a property to the City of Garden Grove that would be condemned and was looking for a property to acquire as part of a 1033 exchange. Adept at maximizing tax advantages for retail property investment sales, Faris Lee informed Newell Owenby Trust that because they had sold their previous property to a municipality for condemnation, they could transfer the favorable tax basis from the previous property into Magnolia Village Plaza utilizing the 1033 exchange. Ultimately, Faris Lee was able to create more value in the final sale price for its client, B U Management, as well as the buyer who was unaware of the 1033 exchange tax advantages.
“Faris Lee advised the buyer to consult with its accountant in order to take advantage of the tax basis transfer of a 1033 exchange which can occur when a property is sold to a municipality for condemnation,” said Richard Walter, president of Faris Lee Investments. “This provided an even lower real estate tax bill than a typical 1031 exchange. It gave the new owner more options for attracting new tenants to Magnolia Village Plaza by passing along to them attractive rental rates. The structure also increased overall returns due to lower triple-net fees.”
Faris Lee also worked to help the seller offer favorable financing for the property.
“Prior to putting the property on the market, Faris Lee negotiated with several financing institutions and identified a lender that provided an attractive financing quote, which also helped add more value and enhanced the final sale price,” said Coo.
Built in 1988 and renovated in 2007, Magnolia Village Plaza was 87 percent occupied at the close of escrow and includes major tenants, Taco Bell, Kaiser Permanente and Joe’s Bar & Grill, as well as MetroPCS, Liberty Tax Service and others. There are approximately 130,000 residents within a three-mile radius of the property with an average annual household income in excess of $76,000.
About Faris Lee Investments
Faris Lee Investments is an advisory and brokerage firm specializing in retail real estate. The company’s team of high-level retail investment and financing experts develop forward-thinking strategies to maximize values of all retail acquisitions and dispositions and to guide clients through complex transactions. Cumulatively, the senior management team of Faris Lee has been involved in more than $20 billion of transactions. Faris Lee’s senior experts are skilled in disposition and acquisition strategies, 1031 exchanges, asset positioning and valuation, marketing, debt and equity structuring, strategic workout and REO solutions and execution. For more information, please visit www.farislee.com.