IRVINE, CA-The sale of a two-tenant property within the Promenade Mall in Temecula for $480 per square foot at an 8.25% cap rate and a $425-per-square-foot sale in Paramount at a sub-7% cap rate illustrate that stabilized properties in good locations still command top prices, according to a broker from Faris Lee Investments who arranged the deals. In the Temecula sale, all-cash 1031 Exchange buyer R&R Real Properties of Los Angeles bought a 10,000-square-foot retail property occupied by Verizon Wireless and the Vitamin Shoppe from Beverly Hills-based Plaza Temecula LLC for $4.8 million; in Paramount, a Los Angeles-based family trust acquired an 11,841-square-foot retail property fully occupied by Sally Beauty Supply, Payless Shoesource, West Coast Dental and Fashion Q for $5 million.

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

According to Conover, the property garnered multiple offers and the team’s marketing strategy was to target 1031 Exchange buyers from Faris Lee’s FLI Exchange, the firm’s proprietary investor database. He notes that the property is located in a trade area that was hit hard by the economy. However, its national credit tenants and close proximity to the successful Promenade at Temecula regional mall produced the all-cash buyer, who paid 98% of the original list price. Built in 2000, the multi-tenant retail property is surrounded by the busiest intersection in the City of Temecula with more than 106,000 cars per day. The Promenade at Temecula is a super regional mall built in 1999 and renovated in 2002 with over 1.1 million square feet of shopping space anchored by Sears, JC Penney, Macy’s and a 15-screen Edwards Cinema. In March 2009, the Promenade at Temecula debuted an additional 126,000-square-foot lifestyle section that features outdoor boutique shops, entertainment, and dining.

The Paramount property that sold was within the Paramount Towne Center, which is anchored by Walmart and an El Super Grocery Store, one of Southern California’s most successful Hispanic grocery operators. The price per square foot and cap rate reflected the strong history of the center’s tenants and the substantial increase in traffic with the recent opening of El Super, according to Faris Lee senior managing director Donald MacLellan, who represented the seller along with Walter.

Built in 1992, the property is located within an extremely densely populated Southern California market area with more than 800,000 people within a five-mile radius. The property is located at what the Faris Lee team calls “an irreplaceable location” at the high-traffic intersection of two major thoroughfares, Rosecrans Avenue and Lakewood Boulevard, which sees nearly 60,000 cars per day. The buyer was represented by Peter Baek of CPI Real Estate.