The seller was Woodland Hills-based Rye Canyon Gateway Plaza LLC, an affiliate of RKR, the original developer of Gateway Village in 2005. The property is occupied by a roster of national credit tenants such as LA Fitness, Smart & Final, California National Bank, Lindora Medical and others.
According to president Richard Walter of Irvine-based Faris Lee, the fast-growing Santa Clarita area "offers high-quality retail product is attracting institutional-quality investors, such as Grosvenor, who have identified this area as one that will offer promising returns year after year." Walter, who represented the seller along with managing director Donald MacLellan of Faris Lee, notes that the Gateway Village property is the second significant retail center sale that Faris Lee has completed in Valencia over the past 10 months.
Walter notes that the deal posed a challenge for the Faris Lee team when a 20,000-sf tenant announced that it would vacate the property after the center had been priced. Faris Lee then restructured the pricing based on the vacancy.
According to Lyon, Grosvenor found the investment attractive for a number of reasons, among them the property's strategic location along the newly improved Newhall Road and its high traffic count. In addition, he says, "Existing vacancies give us the opportunity to improve the mix of retail services."
MacLellan points out that the improvements on Newhall Road has exposed the center to twice as many cars per day and also improved access to the Interstate 5 Freeway. "The customer base is significantly more, and the buyer is provided the opportunity to lease the vacant space to a quality tenant and increase overall rents," MacLellan comments.
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