Landmark Royal Hawaiian Goes to Market

Occupied by the Royal Hawaiian Restaurant & Bar and by Adam Neeley Fine Art Jewelry, the property totals 7,410 sf of building space on a .39-acre lot, with an on-site parking lot with 34 stalls. Jeff Conover, senior managing director with Faris Lee Investments, has the listing.

Properties coming to market along the coast are rare, and Conover points out that this one is on the seaside of Pacific Coast Highway in a high-profile location. He calls it "a secure and stable NNN-leased investment with below market rents in a popular trade area with very low vacancy."

Occupying 6,292 sf, the Royal Hawaiian is filled with traditional Hawaiian and Polynesian décor, tropical fish and fountains. Adam Neeley Fine Art Jewelry has been a tenant of the remaining 1,118 sf on the north side of the restaurant since 2006.

[IMGCAP(2)]The listing of the rare seaside property is one of two unusual retail deals lately involving Faris Lee.

In the other, the Irvine-based firm completed the final sale of a $16.93-million, three-parcel retail break-up strategy that included outparcels at South Bay Pavilion, a regional mall of more than one million sf in Carson, CA.

The last of the parcels to sell was a 4,000-sf freestanding building occupied by Washington Mutual that traded for $2.88 million, with Faris Lee representing the seller. Built in 2006, the property is located at 20710 Avalon Blvd. and includes a NNN lease expiring in 2017. The first two outparcels were sold late last year and included 24 Hour Fitness for $11.25 million and a ground lease sale of Chili's for $2.8 million.

The ownership of South Bay Pavilion, HREG Genesis Carson LLC, was represented by Faris Lee president Richard Walter and Donald MacLellan, a managing director at the firm. MacLellan and Walter also represented the buyer, Los Angeles-based Vantuf LLC. The property sold at a 5.4% cap rate.

According to MacLellan, marketing the Washington Mutual property presented several challenges. "Selling a bank-occupied property in this credit market required a strategic effort to educate potential buyers on the strength of the tenant as well as the irreplaceable location," MacLellan comments.

South Bay Pavilion, which recently underwent an extensive renovation, includes Target, IKEA, Sears, JC Penney, Big 5 Sporting Goods, Jamba Juice, Panda Express and others. The property is located adjacent to the 5 Freeway and is visible to more than 525,000 cars per day.