Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SAN DIEGO-Rolando Plaza, a 72,427-sf grocery-anchored retail center, was sold to a 1031 Exchange for $14 million. The sale brought about a few occupancy issues, however, which emerged during escrow when 27%, or five of the center’s tenants, including its anchor, announced they would be vacating the property.

Despite being situated on 6.16 acres in a high-traffic, high-visibility area near the 15 Freeway, Interstate 8 and San Diego State University, this locale, which was being marketed as a value-added opportunity, hasn’t seen many nationally known tenants in recent years. This is in opposition to most of San Diego County, which has been a hotbed for national retailers. The county’s current retail vacancy rate is 2.4%, with average asking rates around $2.63 a sf and expected to rise, according to Burnham Real Estate’s 2007 Outlook.

Many, including Faris Lee’s Nicholas Coo, who, along with Richard Walter, represented Los Angeles-based seller SCI Real Estate Investments LLC, attribute Rolando’s occupancy difficulties with the perception potential retailers have of a second-tier retail trade area such as this one. Faris Lee’s Dennis Vaccaro represented exchange buyer Orange County-based 1401 Camino Investors LP.

Though the vacancy notice was a setback to closing escrow and meeting the buyer’s cash flow requirements, tight 1031 Exchange timeline and $10-million loan requirement, a lender was found and the deal was closed. According to Coo, the terms of the 10-year, fixed-interest rate loan, which was designed to provide better cash flow during ownership, included, among others, the absorption of tenant vacancies by underwriting the property based on an aggressive pro forma.

Remaining tenants include: Sav-A-Lot Foods, Davita Dialysis and Colortyme Rent To Own.

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
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt. NET LEASE Fall 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information


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 © 2021 ALM Media Properties, LLC. All Rights Reserved.