60,000-sf Shopping Center Commands $25M

The buyer was West 120th-Hawthorne LLC, which acquired the property from Ironwood Hawthorne LLC in a transaction brokered by Richard Walter and Dennis Vaccaro, president and director respectively of Irvine-based Faris Lee, on behalf of the seller. The buyer was represented by Douglas Nye of Manco Development.

Walter says that the Faris Lee marketing campaign targeted private investors with experience in operating properties within Los Angeles County. He describes the Hawthorne Exchange as a quality center with a strong mix of tenants and great location in a densely populated area. The property generated eight offers and closed at a 6% cap rate.

Vaccaro says that the buyer assumed an in-place, 10-year 5.6% fixed-rate loan through October 2015, which is superior to today’s current rates, creating a good cash flow opportunity for the buyer. In order to facilitate the buyer’s 1031 equity requirement, Faris Lee also worked in conjunction with the buyer and its broker to acquire an additional retail property in the Greater Los Angeles area for $3.25 million in order for the buyer to complete its trade.

Built in 2005 and 2006, Hawthorne Exchange is situated on seven acres and was 97% occupied at the close of escrow. Tenants include 24 Hour Fitness Magic Johnson Sport, Starbucks, Sprint/Nextel, the UPS Store, Quiznos, Juice it Up, Countrywide Home Loans and Wescom.

Walter notes that the site also benefits from a new Lowe’s store and Levitz Furniture showroom located directly across the street, making the area a significant retail destination. The center is visible to more than 478,000 cars per day that travel the 105 Freeway, and benefits from monument signage visible from the freeway and nearby roadways.