$21M in Retail Deals: Six NNNs, TIC, 1031

Hanley and William B. Asher of Hanley Investment Group negotiated the sale of four of the NNN properties for a total of $15.4 million. The other two retail deals included sales of $2.8 million and nearly $2.3 million that were brokered by Marcus & Millichap.

The Hanley deals included: $7.8 million for a 23,057-square-foot building occupied by Petco at 4100 E. Mexico Ave. in Denver in a community shopping center anchored by Best Buy; $3.7 million for a 6,276-square-foot free-standing building leased to Chase Bank and Juice It Up at a community shopping center at the southwest corner of Schaefer and Euclid avenues in Chino that is anchored by a Stater Bros. supermarket; $2.15 million for a 4,400-square-foot free-standing building leased to Pacific Dental at the same center and $1.75 million at a 6.8% cap rate for a 4,000-square-foot pad building occupied by a Jiffy Lube in a Stater Bros.-anchored shopping center in Indio. The Jiffy Lube purchase was the TIC deal and 1031 exchange.

A San Diego-based private investor bought the Denver property from Beverly Hills-based Denver Mexico HAH LLC. The deal was consummated within two weeks, including a three-day escrow, and the tenant recently signed a new 15-year lease that includes rental increases every five years.

In Chino, Long Beach-based JMA Investment LLC bought the 6,276-square-foot building and a private investor from Glendale bought the 4,400-square-foot pad from Euclid Plaza LLC of Palm Desert with Hanley, Asher and Phil Berry of Commercial West of Corona del Mar, representing the seller. JMA investment was represented by Mona Fang at Re/Max 2000 Realty in the City of Industry and the Glendale buyer of the 4,400-square-foot pad was represented by Scott Hook of Marcus & Millichap in Irvine.

Asher says that both of the Chino sales represent a recurring theme in today's market. "Private investors that are not in a 1031 exchange are investing in retail properties that generate a better overall return on their money than what they would make in a savings account or CD," Asher explains.

In the Indio deal, the buyer was the Melville Family LP of Glendale, which was represented by Joe Stitick of Investment Property Services in Glendale. "This particular property was attractive due to a 20-year lease term with 18 years remaining and 12% annual rental increases over the next three years," Hanley says.

Asher notes that the Indio Jiffy Lube transaction closed quickly, thanks to seller financing. Seller financing has become a more common way to facilitate sales, "a trend that is sure to continue in 2010, given the lack of attractive traditional financing available in today's market," Asher says. He adds that the TIC structure for the deal enabled the seller to split the parcel in the future and retain the adjacent lot for future development, while allowing the buyer to acquire the Jiffy Lube and satisfy a 1031 exchange.

In the $2.9 million deal brokered by Marcus & Millichap, a private investor bought a 6,735-square-foot building inline property at 560 W. 19th St. from a family trust, according to vice president Paul A. Bitonti of the Newport Beach office of Marcus & Millichap, who was the listing agent. Bitonti notes that the property attracted multiple offers and sold at a 7.4% cap rate.

In the $2.3 million sale, a private investor bought a 4,878-square foot property at 207 Main St. in Huntington Beach that is leased to American Apparel. The seller, a private investor, was represented by vice president Michael R. Woolbright and associate Nathan D. Holthouser of Marcus & Millichap's Newport Beach office. The buyer was represented by Bitonti.