St. Louis Firm's $16M Buys 89,000 SF

MURRIETA, CA-Wolff Properties of St. Louis has acquired an 89,000-sf portion of a 110,000-sf shopping center from San Francisco's Krausz Cos. for $16 million in a 1031 exchange, according to Faris Lee Investments. The property is Winchester Springs, a grocery-anchored shopping center situated on 10 acres at the intersection of Winchester Road (Route 79) and Murrieta Hot Springs Road.Richard Walter and Donald MacLellan of Faris Lee represented the seller, with Nick Coo of Faris Lee representing the buyer. Walter notes that the company marketed the property to institutional investors as well as private investors.Walter points out that the $16 million was a record setting price and came in at a cap rate in the mid-5% range. The property appealed to the buyer for its location in one of the dominant retail and commercial intersections in Murrieta, one of the centers of growth in the Inland Empire.Built in 2004, the center is 100% occupied and is anchored by Albertsons. The grocery store, Subway and some other retail locations were included in the sale. Other tenants include Blockbuster, McDonald's and Bank of America, which were held by the original ownership and were not included in the sale. MacLellan says a challenge to the sale was identifying a buyer willing to accept a low cash-on-cash return based on the overall capitalization rate, but the center's dominant location and the region's growth helped it garner a top price. The center's surrounding population consists of more than 121,000 people with an average household income of more than $70,000 within a five-mile radius, with a projected growth to more than 150,000 over the next five years.