Competition Drives $20M in Retail Deals

Hanley represented Cadence Capital Investments of Greenwood Village, CO, which acquired the retail center from Viejo Properties LLC of San Mateo. Hanley comments that the competition for the property was driven by its future upside potential as well as its South Orange County location. "The seller got comfortable very quickly with the buyer's track record, including owning and managing multiple properties in the immediate area," he says.

Marguerite Plaza, built in 1973, is situated on 3.5 acres and easily accessible via the Interstate 5 Freeway. At the time of sale it was 100% occupied by 10 tenants including Total Woman Health & Fitness Spa, Blockbuster Video, Leslie's Pool Supply, and Little Caesar's Pizza. The seller was represented by Dan Parker of Parker & Associates in Laguna Hills and Don Smith of D.W.A. Smith & Co. in Newport Beach.

In the second deal, a 5,042-sf multi-tenant strip center called Magnolia Plaza at 9025 Warner Ave. in Fountain Valley traded for $4 million, with Hanley and Eric P. Wohl representing the Newport Beach-based private investor who sold the property. The purchase price represented one of the highest prices per sf in the area at $793 and one of the lowest cap rates at 4.95%, Hanley notes.

Magnolia Plaza is located at the high profile intersection of Warner Ave. and Magnolia St., close to both the Warner Ave. and Magnolia St. exits of the 405 Freeway. Built in 1985 and rehabbed in 2002, the center at the time of the sale was 100% occupied by five tenants including Starbucks, GameStop and Verizon Wireless. The buyer was a private investor based in Playa del Rey who was represented by Steve Lund of Marketing Brokers in Huntington Beach.

In the third transaction, a 19,197-sf retail/office center known as Zitny Plaza at 10562-10602 Garden Grove Blvd. in Garden Grove sold for nearly $3.8 million and one of the lowest cap rates in the area at 4.26%. "This was an extraordinary value-add investment opportunity in a dense infill location," says Jeremy McChesney, senior associate at Hanley Investment Group.

McChesney and Kevin Fryman represented the buyer and seller. The buyer, a private investor based in Huntington Beach, "has an outstanding opportunity to increase below-market rents," McChesney observes.

Built in 1960 and remodeled in 1989, Zitny Plaza is close to the 22 Freeway on 1.5 acres and consists of 16 local retail and office tenants servicing the surrounding area. The property, which was 100% occupied at the time of sale, was sold by a private investor from Garden Grove.