The Canyon Springs Shopping Center, located at 2704 Canyon Springs Parkway, was sold by Sandstone Properties Inc.<@SM>Lakeside Terrace Shopping Center, a 55,157-square-foot center, is located at 26150 Iris Ave.

MORENO VALLEY, CA— “Cap rates in secondary and tertiary markets throughout the Inland Empire have declined consistently for retail product over the past several years due to increased risk appetites, low interest rates and improving fundamentals.” That is according to Irvine, CA-based Dixie Walker, an SVP at Cassidy Turley.

GlobeSt.com spoke with Walker in an update to a previous article where the firm sold two shopping centers here in Moreno Valley with a combined value of $34.85 million.The centers sold for the lowest cap rates ever reported for stabilized retail centers over 25,000 square feet in this fast-growing Southern California area, as GlobeSt.com reported.

Despite improving fundamentals, stabilized transactions rarely break under the mid to high 6% cap rate range, even for the most aggressive buyers, Walker tells GlobeSt.com. This transaction “set the low benchmark for acceptable yields in this submarket … confirming the continued stretch for yield across the retail spectrum.”
Lakeside Terrace Shopping Center, a 55,157-square-foot center located at 26150 Iris Ave. in Moreno Valley, which was purchased through a 1031 Exchange by Spathco from IRA Capital LLC. The price of $18 millionor $315 per square foot, reflects an all-time low cap rate of 6.1% for a center of this size in the area, says Walker.

The Canyon Springs Shopping Center, located at 2704 Canyon Springs Parkway, was sold by Sandstone Properties Inc., to Springtree Global LLC, for $16.8 million or $223 per square foot. “The 6.3% cap-rate also sets a new low watermark for mid-size box retail tenants for the Moreno Valley area,” he adds.

“Among contributors to improving fundamentals of the area, that are reflected through investor interest in and sale of these centers: Job growth in Moreno Valley leads the Inland Empire; Trammell Crow’s new I-215 Logistics Center which will be home to Amazon’s new 1.5 million square foot ecommerce facility in Moreno Valley—expected to create over 1,000 jobs; and other notable developments within the city that are expected to expand the economic base include: Highland Fairview’s 1.8-million-square-foot Sketchers logistics facility and Aldi Foods 800,000-square-foot Distribution Center.”