X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SAN JUAN CAPISTRANO, CA-The seller of a 25,561-sf mixed-use center here included a 12-month rent guarantee to the buyer of the 87%-leased property, according to Irvine-based Faris Lee Investments. Donald MacLellan of Faris Lee, who represented the seller, explains to GlobeSt.com that the deal provides for the seller, Irvine-based Citivest, to make up the rent and triple-net charges for the portion of the center that was vacant at the time of the sale.

The property, a two-story project on 1.11 acres at 27184 Ortega Highway, is called the Capistrano Collection and sold for just under $10.2 million to Orange County-based Needleman Investments. MacLellan says that the rent guarantee, an unusual but not unheard of provision in a sales contract, was a means of maintaining the sales price that had been negotiated for the property.

Built in 1991, the Capistrano Collection is approximately two-thirds retail and one-third office, with a diverse mix of tenants. The deal closed at a cap rate of 5.4% on existing income, a record low cap rate for an office/retail project over $10 million in Orange County, according to Faris Lee.

The property attracted about six or eight offers, according to MacLellan, who says that the prospective buyers consisted primarily of local private investor groups and high-net-worth individuals. He notes that properties in San Juan Capistrano command top prices because of the desirability of the area, the lack of land for development and the difficulty of obtaining entitlements.

In addition to the high barriers to entry, another reason for the high prices paid for commercial properties in the city is its strong demographic profile. The Capistrano Collection’s immediate locale, for example, consists of primarily multi-million dollar homes in private, gated communities, with an average household income of more than $117,000 within a three-mile radius of the center.

Buyer Needleman Investments was represented by Tony Azzi, Orbell Ovanespour and Brad Baskin of Marcus & Millichap.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.