"We're seeing cap rates in California of about 5%. When they come here and see they can get a cap rate of 8%, they say 'why not'," Shari Tucker with Sperry Van Ness ' Phoenix office tells GlobeSt.com. And, she should know after closing a sale earlier this month on a 18,640-sf retail center in Ahwatukee that drew 15 bidders--all from California.
"When you're getting a cap rate that is three points higher, it makes sense," Tucker says of the rush of California buyers. The Ahwatukee Commons, a fully leased, two-building complex at 4902 E. Warner Rd. in Phoenix, ended up in the hands of Long Beach investor Jack Ernandez, who outbid 14 other California investors with an offer of nearly $4.2 million.
The first-time Valley buyer pared down the $4.3-million asking price with quick closing terms and a guaranteed sale, thanks to an exchange deal on a California apartment complex, Tucker says.
But it wasn't only the high cap rate that won over the exchange buyer. Tucker says the seller, Scottsdale-based Bayview LLC, recently inked five-year renewals for all of its tenants, which include Goodyear Tire, State Farm Insurance, Army Corp of Engineers and Ruffino's Italian Restaurant.
Tucker coordinated the deal for the seller along with Steve Boxer, also with Sperry Van Ness. Fern Porter of Windermere Properties represented the buyer.
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