MORENO VALLEY, CA— “Cap rates in secondary and tertiary markets throughout the Inland Empire have declined consistently for retail product over the past several years due to increased risk appetites, low interest rates and improving fundamentals.” That is according to Irvine, CA-based Dixie Walker, an SVP at Cassidy Turley.
GlobeSt.com spoke with Walker in an update to a previous article where the firm sold two shopping centers here in Moreno Valley with a combined value of $34.85 million.The centers sold for the lowest cap rates ever reported for stabilized retail centers over 25,000 square feet in this fast-growing Southern California area, as GlobeSt.com reported.
Despite improving fundamentals, stabilized transactions rarely break under the mid to high 6% cap rate range, even for the most aggressive buyers, Walker tells GlobeSt.com. This transaction “set the low benchmark for acceptable yields in this submarket … confirming the continued stretch for yield across the retail spectrum.”
Lakeside Terrace Shopping Center, a 55,157-square-foot center located at 26150 Iris Ave. in Moreno Valley, which was purchased through a 1031 Exchange by Spathco from IRA Capital LLC. The price of $18 millionor $315 per square foot, reflects an all-time low cap rate of 6.1% for a center of this size in the area, says Walker.
The Canyon Springs Shopping Center, located at 2704 Canyon Springs Parkway, was sold by Sandstone Properties Inc., to Springtree Global LLC, for $16.8 million or $223 per square foot. “The 6.3% cap-rate also sets a new low watermark for mid-size box retail tenants for the Moreno Valley area,” he adds.
“Among contributors to improving fundamentals of the area, that are reflected through investor interest in and sale of these centers: Job growth in Moreno Valley leads the Inland Empire; Trammell Crow's new I-215 Logistics Center which will be home to Amazon's new 1.5 million square foot ecommerce facility in Moreno Valley—expected to create over 1,000 jobs; and other notable developments within the city that are expected to expand the economic base include: Highland Fairview's 1.8-million-square-foot Sketchers logistics facility and Aldi Foods 800,000-square-foot Distribution Center.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
