Center Sale Indicates That Retail is Still Alive
Marketing efforts produced more than 283 confidentiality agreements/offering memoranda and through the team’s managed-bid offer process, 19 offers were generated to purchase the property.
SANTA MARIA, CA—As more box anchor spaces are acquired from failing tenants, the mall narrative is expected to become a positive one. A recent example is Santa Maria Town Center, a 331,804-square-foot regional mall on 6.11 acres at 100 Town Center East. The regional mall built in 1976 is anchored by Sears and Macy’s, an Edwards Theatres RPX Digital Cinema, and an assortment of regional and national tenants.
The town center recently sold to a global insurance company, although the Sears and Macy’s were not part of the sale. Sources tell GlobeSt.com the purchase price was approximately $21.5 million and the buyer is looking to redevelop the mall.
“Santa Maria Town Center is uniquely positioned with a high-performing Macy’s and Edwards Theatres with sales exceeding $598,000 per screen, and an operating Sears owned by Seritage Growth Properties, which made this property attractive to investors,” Jimmy Slusher, CBRE vice president, tells GlobeSt.com. “Macy’s had recently renovated its store’s interior and exterior in 2009 and 2013, demonstrating its long-term commitment to the area, and the viability and productivity of this location. In addition to Edwards Theatres, dining, fitness and action sports tenants like Red Robin, Crunch Fitness and Rockin’ Jump promote customer visits both during the day and evening.”
CBRE retail experts George Good, James Tyrrell, Philip Voorhees and Slusher represented the seller, Goldman Sachs, a New York-based global investment banking firm.
“Santa Maria Town Center’s continued performance with year-over-year NOI growth, increasing tenant sales and new tenant leasing interest has bucked today’s mall trends, representative of its downtown location and connection to the residents of the expanded Santa Maria trade area,” said Slusher.
CBRE’s marketing efforts produced more than 283 confidentiality agreements/offering memoranda and through the team’s managed-bid offer process, generated 19 offers to purchase the property from all corners of the country and outside of the US, according to Voorhees.
“Demand remains strong from private opportunistic investors seeking mall assets with limited competition and core locations in the immediate trade area,” Slusher tells GlobeSt.com.
The retail center is adjacent to the Santa Maria City Hall, Civic Center, Santa Barbara Superior Court and the city transit center.
“Opportunities to purchase performing properties for perhaps 20% of land-inclusive replacement cost at double-digit cap rates are very compelling,” says Voorhees. “Malls were built in the center of the trade area locations and Santa Maria Town Center is great real estate. We look forward to following the property’s progress in the years to come.”
There are more than 171,000 people in a 10-mile radius with average household incomes exceeding $77,500 and more than 449,500 people in the Santa Barbara-Santa Maria metropolitan area with average household incomes exceeding $95,000, GlobeSt.com learns.
“Located along California’s central coast, Santa Maria Town Center pulls shoppers from an exceptionally large trade area,” Slusher tells GlobeSt.com. “It enjoys the dominant position in the trade area, with the closest department store/mall shopping either 35 miles north in San Luis Obispo, or 65 miles south in Santa Barbara. The property benefits from a Main and Main location within Santa Maria’s popular Town Center District. Further, this infill Santa Maria location also boasts long-term wealth and savings as bank deposits in the immediate trade area range from $101 million to $160 million, among the highest in the Central Coast.”
With this closing, CBRE’s NRP-West team topped $10.8 billion in closed retail investment sale transactions.