SANTA ANA, CA—David Fried and his Los Angeles-based investment and management company Fried Asset Management, have sold MacArthur Plaza, a 13,468-square-foot multi-tenant retail strip center here, to a Los Angeles-based private investor for $10.9 million or $809 per square foot. The sale represents a market-leading 5.7% cap rate.

The center contains well-known fast-casual restaurant tenants Starbucks, Rubio's, Togo's and Thai Spice. CBRE's retail investment experts SVP Philip D. Voorhees, Jimmy Slusher and their team represented the seller in the transaction.

“The record-setting price per square foot for a strip center of this size in Orange County is the result of the strong rents in place at MacArthur Plaza,” says Voorhees. “The property is the quintessential strip-center investment featuring restaurant, retail and service tenancy, just the sort of property that provides a strong defense against competition from Internet retailers and super rental growth over the hold period.

Voorhees adds that his team's broad, cooperative and systematic approach to marketing produced a very competitive bidding process. The system distributed more than 600 offering memoranda to investors and brokers, and through the team's “managed bid” offer process, generated six aggressive offers to purchase the property in just a few weeks of marketing.

Voorhees tells GlobeSt.com exclusively, “As the economic recovery gains traction, we're seeing more interest from investors in higher-quality strip centers. Rental growth in these assets will substantially outpace comparable single-tenant net-leased investments. Competition for strip-center retail properties is increasing, and we expect improved strip-center sales volumes in the west in 2014, and cap-rate compression—particularly on the 'A' assets in coastal markets.”

Voorhees adds that compared with credit-focused single-tenant investments, strip centers provide better yield, income diversity and potential for better rental growth. “As a result, strip centers have long been coveted by more-sophisticated, higher-net-worth 'family office'-type investors.”

MacArthur Plaza is located at 2 Hutton Center on 1.5 acres in a central, infill portion of the South Coast Metro area of Santa Ana, proximate to the 55 Freeway. Built in 2001, the property was 93% occupied at the start of marketing, and 100% occupied at the time of the sale due to aggressive leasing efforts on the part of Fried, says Voorhees.

As GlobeSt.com reported last week, Voorhees' team is handling the marketing for sale of Garden Grove Festival Square, a retail strip center that caters to the surrounding Asian population in Garden Grove. A Northern California-based private investor seller is asking $12 million for the 72%-occupied space.