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GILROY, CA-The owners of a 325,431-sf retail center called Gilroy Crossing at the intersection of highways 101 and 152 have placed it on the market and have tapped Newport Beach, CA-based Lucescu Realty to market the property. Mark Lucescu, president of Lucescu Realty, tells GlobeSt.com that the center represents a rare listing because centers along the 101 rarely trade and are highly prized by investors.

No asking price is listed on the offering, but the property is expected to sell for somewhere in the mid-$80-million range, which would be pretty close to the price that the center sold for in 2006. The seller is Lakha Properties-Gilroy LLC, which bought the property in late 2006 for $86 million, according to a GlobeSt.com report at the time.

Lucescu tells GlobeSt.com that in addition to its location along Highway 101, one of the main north-south thoroughfares in the region, the center is occupied by national anchor tenants that are all No. 1 in their respective categories and that its location also gives it the first shot at much of the traffic in the area. “The intersection is also home to a Wal-Mart, Lowe’s, Costco, Best Buy, and a bunch of other boxes, and when you come off the freeway, you have to pass our center before you get to the others, so we get all of the traffic first,” he explains. In addition, the South Silicon Valley location offers good demographics, with annual household incomes approaching $100,000, Lucescu adds.

The financing for Gilroy Crossing is also expected to work in its favor. Lucescu says that the buyer will need to assume an existing 5.01% loan of $49 million that has another six years to run, including one more year at interest-only. Before the credit crunch, buyers might have preferred to get all-new financing, but in today’s world, assumable debt like this will make the property more attractive, Lucescu points out. “Especially in this market, anything above $20 million or $30 million is hard to finance,” he notes.

Built in 2004, the center has been 100% occupied ever since it was completed. The 325,431-sf portion of Gilroy Crossing that is for sale is part of a 473,640-sf center that includes a Target store. The portion that is on the market includes everything except the Target.

Lucescu expects that the property will draw interest from quite a few buyers looking for stable assets, including pension funds, high-net-worth individuals and private investment groups. Before market conditions changed, a property like this one almost assuredly would have sold for considerably more than it sold for two years ago. But in today’s world, “There have been so many changes in the market in terms of what people’s yield expectations are that it’s a testament to the strength of the tenant roster at this center that the price has held despite all of the negative news in the investment and retail worlds,” Lucescu says. He notes that other properties in many cases are worth less than they sold for a few years ago.

The center is not being marketed on a call-for-offers basis and no deadline has been set for the close. “We will respond to prospective buyers as offers are received,” Lucescu says.

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