Sale of Multi-Tenant Retail Pad to New Walmart Supercenter in Ontario for $6 Million
Sale represents a record for lowest cap rate and highest price per foot for a multi-tenant retail building shadow-anchored by Walmart in California
Ontario, CALIF. – Hanley Investment Group Real Estate Advisors, the sale of a 6,786-square-foot multi-tenant retail pad to a new Walmart Supercenter in Ontario, Calif. The sale price of $5,968,800, representing a cap rate of 5.02% and $880 per square foot, achieves a record low cap rate and the highest price per square foot for a multi-tenant pad building shadow anchored by Walmart in California, according to CoStar.
Located at 1337 N. Mountain Avenue on 1.05 acres, the building was 100% occupied by national and regional tenants including T-Mobile, Yogurtland, Waba Grill, and Wells Fargo at the time of the sale. The property underwent a full interior and exterior remodel completed in April 2016. “The property is the only other retail within the Walmart Supercenter, making the space highly sought after by high quality tenants,” said Wohl.
The property, which is located on Mountain Avenue, the major retail corridor in Ontario, benefits from the 35,000 cars per day and the convenient Interstate 10 freeway on/off ramp, which is just 1.5 blocks north of the property with 247,000 cars per day.
Executive Vice President Eric Wohl represented the seller, Pacific Development Group based in Newport Beach, Calif. Joong-In (James) Kwon with Coldwell Banker Best Realty in Fullerton, Calif. represented the buyer, a private investor based in Irvine, Calif. Pacific Development Group is known as one of the preeminent shopping centers developers in California and has been responsible for the development of over 300 shopping centers ranging from small strips centers to large one million-square-foot community shopping centers.
According to Bob Lewis, the partner at Pacific Development Group who handled the sale for the firm, “Hanley Investment Group did an excellent job on the sale, and I was surprised how quickly they got the asset to market and the number of quality offers that they generated in such a short time frame.”
According to Wohl, “Utilizing our extensive database, we were able to generate multiple offers within the first week of marketing and selected a qualified 1031 exchange buyer who closed escrow at 98% of the list price with a 50% loan without requiring a financing contingency.”
“The market for shadow-anchored multi-tenant retail in southern California is still very strong,” said Wohl. “These types of investments are a great alternative for passive investors looking for a better yield than a single-tenant retail property where cap rates in southern California are dipping as low as 3.75% for prime assets leased to national credit tenants on long-term leases,” Wohl noted.
“The amount of daily customer traffic generated by Walmart, along with being situated at one of the most highly-travelled intersections in Ontario, were highly attractive selling points to the long-term stability of the location and the main reason the property was pursued by a large group of prospective buyers.”
Another highlight of the property was the long-term leases. According to Wohl, there will be zero tenant rollover until 2021 with over 77% of the GLA leased through 2026.
About Pacific Development Group
Founded in 1980, Pacific Development Group and its partners currently own and manage over three million square feet of commercial buildings with approximately 600 tenants with a value in excess of one billion dollars. These properties are located throughout California and consist primarily of major tenant anchored shopping centers. The company is actively pursuing development opportunities. See www.pdgcenters.com
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a retail investment advisory firm with a $5 billion transaction track record nationwide, who works closely with individual investors, lending institutions, developers, and institutional property owners in every facet of the transaction to ensure that the highest value is achieved. For more information, visit www.hanleyinvestment.com