Center With Unusual Anchor Scores $22M

According to Shaun Riley, director of advisory services for Irvine-based Faris Lee Investments and the seller's representative, the marketing challenge was unusual even though the center was fully occupied at the time of the sale. The property is anchored by a tenant called the Ice Palace that is not a traditional anchor.

Riley explains that the Yorba Linda Ice Palace is subleasing the Ralph's (Kroger) anchor space. He says that since the Ice Palace is not a traditional retail anchor, it is expected that the property will be repositioned in the future.

Faris Lee was faced with the challenge of identifying potential buyers who would understand the property's value-added potential through bringing the below-market rents up to current rates, as well as signing new tenants, Riley says. The Irvine-based brokerage thus targeted 1031 exchange buyers who understood the strong dynamics of the Orange County retail property market.

"Our challenge was to educate buyers on how to handle the upcoming re-tenanting of the anchor which could eventually change the tenant makeup of the entire center," Riley says. Among the points that Faris Lee emphasized to buyers is that Yorba Linda's retail vacancy rate is approximately 2% and the demographics in the local trade area offer high annual household incomes, averaging $143,000.

The center, which sits on a site of more than 9.4 acres, is leased by a diverse tenant mix including dental, home improvement, food, child care, tutoring, professional services business, a fitness center and others. Its location is just off the 91 Freeway on the northeast corner of East La Palma Avenue and Via Lomas De Yorba Street.

Riley adds that Bryant Ranch Shopping Center also benefits from its location near Savi Ranch Power Center, a 500,000-sf property that features Best Buy, Costco, Home Depot, Kohls, Staples, PetsMart, TGI Fridays, Olive Garden, El Torito and many others. Buyer First Duarte was represented by Stephanie Liang of Century 21 E-N Realty. First Duarte assumed an existing loan on the property, which sold at a 6.5% cap rate.