X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

IRVINE, CA-Below-market financing was one of the chief factors driving the sale of a part of a new retail center in Rancho Cucamonga that recently traded for $11 million, according to Irvine-based Faris Lee Investments. Jeff Conover, senior managing director at Faris Lee, explains that the 1031 exchange buyer assumed a fixed-rate loan at 5.33% in acquiring 25,002 square feet of shop space within Day Creek Village, a grocery-anchored shopping center at 12223-12273 Highland Ave.

According the Conover, the key to the deal was securing a buyer willing to put 60% down and assume an existing loan on the property. Conover represented the seller, Newport Beach-based Day Creek Investors LLC. The 1031 exchange buyer was Towne Park Plaza LP, which was represented by first vice president Scott Hook of the Newport Beach office of Marcus & Millichap.

Built in 2004, Day Creek Village is a 100% leased shopping center anchored by Ralphs, which was not a part of the sale. Tenants included in the sale were Starbucks, Wells Fargo, the UPS Store and Supercuts. The shopping center is close to the I-210 Freeway on/off ramp, with more than 156,000 cars per day traveling by the center.

Conover says that the property offered offered the investor “a unique opportunity to acquire a portion of a newly constructed, 100% leased retail property with an excellent tenant roster, below-market assumable debt and an attractive total return.” According to Richard Walter, president of Faris Lee Investments, the deal reflects a trend in the market: “There is a flight to real estate because it provides cash-on-cash returns versus alternative investments such as stocks, bonds and CDs, which continue to be challenged,” Walter comments. Even though retail real estate is getting a lot of bad press, Walter adds, “It is ultimately the shining star, with caution.”

According to Hook of Marcus & Millichap, the deal closed at a cap rate of 7.59%. He notes that the center is located in a high-growth area and that the average household income within three miles of the center is more than $89,000 per year.

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?

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