CANOGA PARK,CA-A local chain of veterinary facilities has acquired an 88% vacant approximately 15,500-square-foot retail strip center and plans to occupy much of it for its own use. David Chasin, EVP of Los Angeles-based Pegasus Investments, tells GlobeSt.com that the new owner will operate a veterinary clinic at the property, which had a strong history of long-term tenancy before a combination of factors including a declining economy and new retailer competition in the area led to the high rate of vacancy.

Chasin and Aaron Aszkenazy of Pegasus represented the seller of the retail strip center, a Los Angeles based investment company. The buyer was Value Vet, which was represented by Terry Adams of Told Partners in Woodland Hills.

The buyer used a combination of cash and proceeds from SBA financing to purchase the property, which is at 21720-21724 Sherman Way. The purchase price was $1.55 million.

Commenting on the deal, Chasin says, "Vacant commercial buildings have been popular lately given the attractive owner/user financing as well the amount of value-added investor money which has been sidelined for a long period of time."

Although interest rates have crept up since hitting their lows last year, "on a historical basis it's extremely attractive for tenants to purchase their own real estate right now", Chasin added. "Many of our investor clients with vacant buildings are taking advantage of this tail wind in the market right now."

In the last 12 months, Pegasus has completed the sale of five vacant properties to owner/users, two of which were sold in connection with a Chapter 11 bankruptcy sale and one of which involved a lender short sale. Owner/users aren't the only buyers in the market for vacant buildings, however, Chasin notes. "Value-added investors who have been sidelined for the last 24-36 months are growing increasingly frustrated with the lack of deal flow," he said. "The number of offers we have received and submitted on behalf of value-added investors has shot up as the probability of a double-dip recession has fallen. That's not to say investors are being stupid this time around. We're seeing much tighter underwriting incorporating lower rents, higher vacancy and higher exit cap rates."