Sale of L.A. Fitness in Lake Elsinore
FARIS LEE INVESTMENTS COMPLETES $8.8 MILLION SALE OF L.A. FITNESS-OCCUPIED RETAIL PROPERTY IN LAKE ELSINORE, CALIFORNIA
- Utilizing its lender relationships, Faris Lee secures below market rate loan with favorable terms prior to marketing property
- Property is sold at a cap rate of 8.5 percent – the lowest for a fitness property in Southern California since 2009
Lake Elsinore, CA – September 20, 2010 – Faris Lee Investments, the nation’s largest retail-specialized investment sales and advisory team, has completed the $8,805,000 sale of a 45,560-square-foot retail building fully occupied by L.A. Fitness. Built in 2007, the center is situated on approximately 4.27 acres and is located at 18550 Dexter Ave. in Lake Elsinore, Calif. with full frontage and visibility from Interstate 15 directly off the Central Ave. exit.
Richard Walter, president and Chris Tramontano, director at Faris Lee Investments, represented the seller/developer, Aliso Viejo, Calif.-based California Grand Investments, LLC in partnership with Lake Fitness, LLC. The buyer, a private trust from Villa Park, Calif., was in a 1031 exchange. The cap rate was 8.5 percent.
“For every property it represents, Faris Lee does a critical review to identify and solve any challenges that could occur in the marketing process,” said Richard Walter, president of Faris Lee Investments. “Our knowledge of the lending environment indicated that obtaining a loan on the asset would be extremely difficult for a buyer. Prior to putting the property on the market, we leveraged our long-standing lending relationships to secure a loan on the property with more favorable terms than anything else available. With the loan secured, we marketed the property to key potential buyers within our proprietary investor database.”
The loan on the property totaled $6,120,000 at a 6.5 percent interest rate for a seven-year term. The loan terms were also a factor that allowed Faris Lee to garner an aggressive sale price on the property.
“In addition to the favorable loan terms, the property offered the buyer a strong tenant with a 15-year, triple net lease, and the substantial intrinsic value of the excellent freeway-adjacent location,” said Tramontano. “Faris Lee was able to garner eight offers, identified a qualified 1031 exchange buyer, and closed escrow at an 8.5 percent cap rate. This cap rate is significant because of the Inland Empire location and single purpose nature of the property. Even when you compare Los Angeles and Orange County markets, it’s still the lowest rate for a single tenant fitness facility in Southern California since 2009.”
The L.A. Fitness property includes an indoor swimming pool and 228 parking spaces. It is located off I-15 and Hwy 74 providing visibility and easy access to nearly 150,000 cars per day.
About Faris Lee Investments
Operating from its Irvine, Calif. headquarters and New York City, Phoenix and Las Vegas offices, 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.