A Los Angeles-based private individual acquired the 8,220-sf Palo Verde Retail Center at 1785 Palo Verde Ave. from a San Francisco-based trust for close to $2 million, according to Jason Afshar of Sperry Van Ness' Irvine office, who brokered the deal.

The sales price of $241 per sf for the one-building concrete block and stucco center was relatively high for a property the age of the Palo Verde center, which was built in 1984, says John McDermott, regional manager for Sperry Van Ness. Yet McDermott says the price was not that surprising, considering the intense interest in such properties from prospective buyers.

The price also was hefty because the center benefits from an unusually large customer base of students, faculty and local residents, thanks to its location next to the university and near residential neighborhoods. "We had 283 phone calls after our first newspaper ad for this one," McDermott tells GlobeSt.com. He says the calls crashed broker Afshar's voice mail box, requiring the Sperry Van Ness receptionist to resort to taking messages the old-fashioned way, on paper.

About 70% of the calls were from brokers and 30% from principals. Ultimately, 12 prospective buyers submitted bids for the center, which is 100% leased to five tenants anchored by 7-Eleven. A number of the prospective buyers were in 1031 Exchanges, but the one who got the deal was not.

McDermott says the price might have been higher, except that 7-Eleven has less than a year left on its lease. "If 7-Eleven would have been in the first year of a 15-year lease...," he says, the property might well have commanded a higher price because other small centers in Orange County have gone for significantly higher prices per sf with longer-term credit tenants.

Financing for the deal took several months to complete because the property is a former gas station and the lender wanted assurances that all environmental concerns have been addressed, McDermott notes.