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SANTA CLARITA, CA-Los Angeles-based investment partnership Zimmerman Commercial Partners bought the 71,652-sf Sierra Crest Center in Santa Clarita from Beverly Hills, Calif.-based Westminster Capital for $8.85 million.

The center was built in 1991 at a cost of about $12 million, broker Gregory Mills of Marcus & Millichap tells GlobeSt.com, explaining that the property was leased initially at premium rates, up to $2 per sf, but it struggled financially when the recession of the early 1990s hit Southern California. Seller Westminster Capital then acquired the center some years later, after it went into foreclosure.

Mills, who represented the seller along with Marcus & Millichap’s John Erthein, says the transaction represented a good deal for both buyer and seller because the buyer acquired it at a price below replacement cost and the seller realized substantial appreciation after adding value by filling the property with new tenants.

The sales price amounted to $124 per sf, while building a new center would cost about $150 per sf, Mills pointed out. The buyer also has further upside potential because the property includes two pads, one of 5,000 sf and another of 6,000 sf, that could be developed as additional retail space, Mills tells GlobeSt.com.

The shopping center is on a 4.35-acre parcel at 27125 Sierra Highway in Santa Clarita, a fast-growing city about 35 miles northwest of downtown Los Angeles that includes most of Valencia, the 15,000-acre planned community being developed by Newhall Land and Farming Co. Tenants at Sierra Crest include Taco Bell, State Farm Insurance, Firestone Tires, Primerica Financial, and EZ Lube.

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