$39M Retail Sale Further Squeezes Cap Rates

ALISO VIEJO, CA-The recent $39 million sale of the 47,000-sf Shops at Aliso Viejo Town Center represents one of the highest prices per sf for a stabilized multi-tenant center of its size and closed at a 5% cap rate, according to Faris Lee Investments. The Irvine-based brokerage says that the 5% figure is also believed to be the lowest recorded for a stabilized multi-tenant retail property of its type.The buyer was YJC Investment Group from Los Angeles, which acquired the property from Leaseback Inc. and Lazares Cos., the original developers of the property. The seller's investors include partners in San Diego, the San Francisco Bay Area and Houston.Faris Lee's Richard Walter, president of the company, and Dennis Vaccaro, director of its Investment Advisory Group, represented Leaseback and Lazares. David Kim of Pacific Century Investments represented the buyer.Vaccaro notes that the transaction, which was sold in three separate pieces, was extremely complicated and required the buyer to assume two loans on two of the pieces and obtain a new loan on the third piece. Walter calls the $830 per-sf purchase price "testament to the area's continued economic strength as well as the overall success of Aliso Viejo," a South Orange County master-planned community. The Shops at Aliso Viejo Town Center comprises six one-level buildings that are connected via exterior walkways, courtyards and driveways, totaling 46,933 net rentable sf.The buildings are at 26601, 26611, 26705, 26741, 26841 and 26851 Aliso Creek Rd. They were built in 1998 and occupy a site of 4.22 acres.The property that sold constitutes a portion of Park Plaza at Aliso Viejo Town Center, one of Orange County's largest entertainment and community centers, which totals 700,000 sf. Additionally, the greater Aliso Viejo Town Center totals more than 300 acres and incorporates Summit Office Campus, Hoag Health Center of Aliso Viejo, Grand Park and outdoor amphitheater, Town Center Corporate Park and two major condominium and apartment complexes.