LOS ANGELES—The tenant in a retail transaction may be appealing, but the asset itself drives demand and competition in a sale transaction. The Tesla-leased retail property on the Third Street Promenade in Santa Monica recently traded hands in a highly competitive transaction, and while Tesla's occupancy certainly helped, the quality of the real estate was the most important to investors bidding on the deal.
“Tesla is an exciting and attractive tenant. This certainly added to the appeal of the property, but the real estate is the main attraction,” Tim Bower, a broker at CBRE who represented the seller in the transaction, tells GlobeSt.com. “The appeal of the site was closely tied to its location.” Bower represented the seller along with CBRE's Ken McLeod and Tim Kuruzar.
KLM Properties purchased the 3,000-square-foot property for $15.6 million from an undisclosed seller. It generated one of the largest responses that the sales team generated on any other transaction this year. That was mainly due to the real estate and the location, which sees 40,000 people a day in foot traffic and where properties rarely come to market. “Opportunities to buy on the coveted 3rd Street Promenade are rare,” says Bower. “Many owners hold properties here long term. This was an amazing chance for the buyer to get their hands on a property that is perfectly situated in the epicenter of one of Southern California's premier shopping destinations.”
When properties do trade hands, they usually are sold off market, making this an unusual transaction. “I think this deal was unique in that it actually went to the broad market,” adds Bower. “Often sales on the Promenade are not widely marketed, if at all. But given that Santa Monica is experiencing such a significant economic growth trend that is expected to continue in the years to come, we knew lots of investors—local, national and global—would be seriously drawn to this opportunity.” That economic growth includes significant redevelopment in the Downtown center, like the $50 million dollar restoration of the City Hall building, a $55 million seven-acre redesign of Palisades Park and the $265 million renovation of the Santa Monica Place mall.
LOS ANGELES—The tenant in a retail transaction may be appealing, but the asset itself drives demand and competition in a sale transaction. The Tesla-leased retail property on the Third Street Promenade in Santa Monica recently traded hands in a highly competitive transaction, and while Tesla's occupancy certainly helped, the quality of the real estate was the most important to investors bidding on the deal.
“Tesla is an exciting and attractive tenant. This certainly added to the appeal of the property, but the real estate is the main attraction,” Tim Bower, a broker at CBRE who represented the seller in the transaction, tells GlobeSt.com. “The appeal of the site was closely tied to its location.” Bower represented the seller along with CBRE's Ken McLeod and Tim Kuruzar.
KLM Properties purchased the 3,000-square-foot property for $15.6 million from an undisclosed seller. It generated one of the largest responses that the sales team generated on any other transaction this year. That was mainly due to the real estate and the location, which sees 40,000 people a day in foot traffic and where properties rarely come to market. “Opportunities to buy on the coveted 3rd Street Promenade are rare,” says Bower. “Many owners hold properties here long term. This was an amazing chance for the buyer to get their hands on a property that is perfectly situated in the epicenter of one of Southern California's premier shopping destinations.”
When properties do trade hands, they usually are sold off market, making this an unusual transaction. “I think this deal was unique in that it actually went to the broad market,” adds Bower. “Often sales on the Promenade are not widely marketed, if at all. But given that Santa Monica is experiencing such a significant economic growth trend that is expected to continue in the years to come, we knew lots of investors—local, national and global—would be seriously drawn to this opportunity.” That economic growth includes significant redevelopment in the Downtown center, like the $50 million dollar restoration of the City Hall building, a $55 million seven-acre redesign of Palisades Park and the $265 million renovation of the Santa Monica Place mall.
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