Despite being situated on 6.16 acres in a high-traffic,high-visibility area near the 15 Freeway, Interstate 8 and SanDiego State University, this locale, which was being marketed as avalue-added opportunity, hasn't seen many nationally known tenantsin recent years. This is in opposition to most of San Diego County,which has been a hotbed for national retailers. The county'scurrent retail vacancy rate is 2.4%, with average asking ratesaround $2.63 a sf and expected to rise, according to Burnham RealEstate's 2007 Outlook.

Many, including Faris Lee's Nicholas Coo, who, along withRichard Walter, represented Los Angeles-based seller SCI RealEstate Investments LLC, attribute Rolando's occupancy difficultieswith the perception potential retailers have of a second-tierretail trade area such as this one. Faris Lee's Dennis Vaccarorepresented exchange buyer Orange County-based 1401 CaminoInvestors LP.

Though the vacancy notice was a setback to closing escrow andmeeting the buyer's cash flow requirements, tight 1031 Exchangetimeline and $10-million loan requirement, a lender was found andthe deal was closed. According to Coo, the terms of the 10-year,fixed-interest rate loan, which was designed to provide better cashflow during ownership, included, among others, the absorption oftenant vacancies by underwriting the property based on anaggressive pro forma.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.