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.