LOS ANGELES—Two triple net-lease assets have traded hands in Southern California for a total of $32 million. Two separate buyers purchased the properties, located in Santa Barbara, CA, and Pasadena, CA. Studley’s National Retail Services Group represented the sellers in each of the transactions.
Completing a 1031 exchange, USA San Diego LLC, a local private investor, purchased a 47,000-square-foot office building from Mason SB LLC. “Our client was able to realize tremendous upside in just two short years of ownership as the Funk Zone continues to gentrify and the demand for creative-style offices grows,” says Kyle Miller, a Studley broker who represented the seller along with his colleagues Bill Bauman and Marc Navarro. The property currently houses the headquarters of Sonos, a music equipment manufacturer. The property is located in Santa Barbara’s Funk Zone, one of the prime locations of the submarket with a thriving retail sector. In an earlier story, GlobeSt.com reported three retail properties fetching $20 million in the same neighborhood.
In the second transaction, Houston’s Restaurant purchased its leased space from Catellus GL I LLC. The American food restaurant exercised its option to buy after signing a 15-year lease extension. “After negotiating the lease extension with Houston’s, the seller determined that the market was ripe to capitalize on a trophy, single-tenant asset in a trophy location,” says Bauman. “Ultimately, our client and the existing tenant came to very favorable terms, allowing Houston’s to control an exceptionally successful location for the long term and the seller to realize significant gains on an investment owned for multiple decades.”
Houston’s wasn’t alone. Several other investors, including pension funds and foreign investors, expressed interest in the asset. In addition to a long-term, stable tenant, investors were also driven by the location. Located at Arroyo Parkway and Del Mar Boulevard in Pasadena, the property is near several luxury condos as well as a Metro Gold Line Station, the 110 Freeway and Old Towne Pasadena.