87,000-SF Retail Center Commands Sub-6% Cap Rate

SANTA CLARITA, CA-The 87,094-square-foot Northpark Village Square has sold for $40 million at a sub-6% cap rate in a deal that "generated strong demand from worldwide institutional investors." That's according to Tom Lagos, senior vice president and director of the retail services group in Colliers International’s Downtown Los Angeles office. Lagos represented the seller, Northpark Village Corp., an entity advised by Cornerstone Real Estate Advisers LLC.

The sale "proves there is a large investor appetite for quality core grocery-anchored retail properties," Lagos said. The property attracted 23 qualified offers, 22 of which were all cash, within three weeks of the beginning of the marketing campaign, Lagos noted. "The sub-6% cap rate achieved for this transaction is an indicator of the strong demand we had from worldwide institutional investors, capitalizing on the historically wide spreads between cap rates and treasury rates” Lagos said.

The property, at 27706-27760 McBean Parkway, is anchored by a high-performing Ralphs, and includes Rite Aid, Wells Fargo and Starbucks as tenants. Built in 1996 and having undergone expansion in 1999, the center has maintained at least 95% occupancy since its construction.

Commenting further on the deal, Lagos said: “This demand for quality anchored shopping centers may not last very long, so I hope investors who have been sitting on the fence about selling their shopping centers take notice of this sale and seize the opportunity to dispose of their properties this year. I must warn that even though market conditions are right and buyer demand continues to be strong, all properties are different and you must have the right sales strategy to maximize value.”

Colliers would not reveal the buyer, citing confidentiality agreements, but other sources tell GlobeSt.com that the buyer was TIAA-CREF.