GARDEN GROVE, CA—An Orange County-based private investor has made its first commercial-property venture by buying of Garden Grove Festival Square, a 35,515-square-foot retail strip center here, from Atherton, CA-based investment company Meredith Enterprises for $11.9 million, representing a 5.59% cap rate. The center is leased to a mix of regional and local tenants including Popular Community Bank, Woori American Bank and United Dental Group.
CBRE‘s retail investment experts SVP Philip Voorhees, Brad Rable, Megan Read, Matt Burson, Jimmy Slusher and John Read represented the seller, while a cooperating/selling broker represented the buyer. As GlobeSt.com reported previously, the seller’s team began to market the center, which caters to the surrounding Asian population here, in March. The sale price matches the asking price of $12 million for the space, which is 72% occupied.
Garden Grove Festival Square is located at 10120-10130 Garden Grove Blvd. and Brookhurst St. and sits on a 3.1-acre site directly across from the Brookhurst Triangle, a planned 600-unit residential development that will also have a small retail component. The corner Popular Community Bank pad was built in 1967, and in 2006 the remaining center was built.
According to Voorhees and Rable, the CBRE team’s marketing system distributed more than 447 offering memoranda to investors and brokers, and through the team’s “managed bid” offer process, generated more than nine offers to purchase the property. “The low cap rate based on 72% occupancy demonstrated the project’s quality and the buyer’s belief in Garden Grove Festival Square’s location and long-term potential,” says Voorhees. “The area around the property is in transition from predominantly Korean to an increasingly Vietnamese trade area. The purchaser owns close to 30 properties proximate to Garden Grove Festival Square and plans to reposition the asset leveraging his deep relationships within the community.”