IRVINE, CA-The sale of a two-tenant property within thePromenade Mall in Temecula for $480 per square foot at an 8.25% caprate and a $425-per-square-foot sale in Paramount at a sub-7% caprate illustrate that stabilized properties in good locations stillcommand top prices, according to a broker from Faris LeeInvestments who arranged the deals. In the Temecula sale, all-cash1031 Exchange buyer R&R Real Properties of Los Angeles bought a10,000-square-foot retail property occupied by Verizon Wireless andthe Vitamin Shoppe from Beverly Hills-based Plaza Temecula LLC for$4.8 million; in Paramount, a Los Angeles-based family trustacquired an 11,841-square-foot retail property fully occupied bySally Beauty Supply, Payless Shoesource, West Coast Dental andFashion Q for $5 million.

The Temecula sale represented the highest price per square footfor a multi-tenant retail property to be sold in the City ofTemecula for the past two years, according to senior managingdirector Jeff Conover and president Richard Walter of Faris Lee,who represented the seller. The higher cap rate reflected the shortterm of three years remaining on each lease, meaning the buyer tookon some additional risk, according to Conover and Walter.

According to Conover, the property garnered multiple offers andthe team’s marketing strategy was to target 1031 Exchange buyersfrom Faris Lee’s FLI Exchange, the firm’s proprietary investordatabase. He notes that the property is located in a trade areathat was hit hard by the economy. However, its national credittenants and close proximity to the successful Promenade at Temecularegional mall produced the all-cash buyer, who paid 98% of theoriginal list price. Built in 2000, the multi-tenant retailproperty is surrounded by the busiest intersection in the City ofTemecula with more than 106,000 cars per day. The Promenade atTemecula is a super regional mall built in 1999 and renovated in2002 with over 1.1 million square feet of shopping space anchoredby Sears, JC Penney, Macy’s and a 15-screen Edwards Cinema. InMarch 2009, the Promenade at Temecula debuted an additional126,000-square-foot lifestyle section that features outdoorboutique shops, entertainment, and dining.