PHOENIX-A 1031 trade has netted a Southern California investor its first retail investment in Arizona with the $11.9-million acquisition of Sprouts Marketplace at the Biltmore. With the purchase, buyer Mission Viejo Investments of Laguna Beach adds a rehabbed 63,635-sf neighborhood retail center to its portfolio.
According to Greg Valladao, vice president with locally based Grubb & Ellis/BRE Commercial LLC, the seller had acquired the neighborhood center at 2824 E. Indian School Rd. in 2002 with an open anchor grocery spot. The seller is Arcadia Plaza LLC, a partnership with ties to San Diego and Phoenix. "It was an old ABCO, part of the Fleming Group of grocers, which had closed in the late 1990s in Phoenix," he says.
Following the rehab, Valladao says the seller brought in Sprouts Farmers Market, a fresh produce and vitamin store headquartered in nearby Scottsdale. The anchor tenant attracted other tenants, primarily local businesses. Today, the 20-year-old center has a 98% occupancy, with the average lease on a five-year term, according to the broker.
Valladao tells GlobeSt.com that the listing brought in 10 offers, with Mission Viejo Investments outshining the others with the highest offer. "He understood the area. He knew the demos and he liked the fact it was an infill location in a very strong market," he says.
Valladao says the buyer stuck out a lengthy escrow period due to assumption of a conduit loan to get a good asset with a bright future. "The demos are improving daily," he says. "There are a lot of condos going up around there and a lot of activity around there." Ryan Schubert, a senior associate with Grubb & Ellis/BRE in Phoenix and Steve Rowland, vice president with Grubb & Ellis/BRE Commercial in San Diego helped to arrange the sale.
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