Former Bakery Site Commands Top Dollar

SAN PEDRO, CA-Target Corp. paid $47.50 per sf for an infill parcel of nearly 9.9 acres as retail developers bid up the price of a former Interstate Bakeries land parcel in a bankruptcy auction recently, according to Greg Gotthardt, managing director of the Los Angeles office of Alvarez & Marsal's real estate advisory practice.Gotthardt tells GlobeSt.com that Target's $18.7-million winning bid for the parcel at the northwest corner of North Gaffey Street and Capitol Drive came after spirited bidding by Target and Carlsbad-based GMS Realty, a shopping center developer. He says Alvarez & Marsal, which is acting as financial adviser to Interstate Bakeries in its bankruptcy, was "astounded" at the $47.50-per-sf price for land in the middle of an industrial area of San Pedro.The property, where a bakery operated for 70 or 80 years, is surrounded by primarily industrial uses, with some tank farms not too far away, and no households to the east of it because everything to the east is port land. All of the households that might support retail at the site lie to the south, the north and the west of the property, Gotthardt points out.The sales price "goes to show that where you have large infill locations, they have the potential to draw top dollar," Gotthardt says. He notes that the property went to auction with a bid of $14 million or more already on the table, but the price rose quickly during heated bidding at the auction.Interstate's real estate brokers on the sale were Steve Calhoun and William Bauman of Colliers Seeley International. Gotthardt notes that Calhoun and Bauman arranged to have some Little League baseball fields on the property relocated to another site next year so that the ball fields would not be an encumbrance to selling the property. The property includes a 171,028-sf industrial building, but the industrial building "didn't have any contributory value" to the sale, which was based on land value, Gotthardt explains.