Investor Pays $162/sf for Two-Tenant Covina Building

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RENTV.com

A 39.2k sf, two-tenant retail building in Covina sold for $6.36 mil, or $162/sf. The building, occupied by Ross Dress For Less (dba dd’s Discounts) and Stars Gymnastics, is located at 404-410 N. Azusa Ave, just north of I-10 at Rowland St. 

The property is in the heart of the San Gabriel Valley, approximately 1.5 miles from Interstate 10 (218,000 cars per day), and easily accessible from the Interstate 210, Interstate 605, and State Route 57 freeways. It is part of the Covina Shopping Center, a community shopping center that includes other notable tenants such as Smart & Final Extra! and CVS/Pharmacy. 

The two-tenant inline building, which was built in 1979, sits on 3.83 acres and features a 27.4k sf dd’s Discounts and an 11.8k sf Star Gymnastics. dd’s Discounts has been a tenant in the building since 2005. Star Gymnastics, which has been in business for nearly 25 years in the area, relocated to Covina Shopping Center in 2017. 

Bill Asher, Ed Hanley and Jeff Lefko with Hanley Investment Group Real Estate Advisors represented the seller, a family partnership based in Orange County. The buyer, Cecelia LLC from Los Angeles, was repped by Moon Lim of Marcus & Millichap. 

“We generated an incredible volume of interest due to the property being in Los Angeles County and more specifically the San Gabriel Valley,” said Asher. “The property was an attractive investment due to its dense infill location with over 470,000 people located in a five-mile radius and close proximity to four major freeways – Interstates 10, 210, 605, and State Route 57 freeways. The supply of quality retail assets that come up for sale in the San Gabriel Valley submarket is limited from year to year. When they become available, they are followed by a tremendous amount of demand, multiple offers, and top-level pricing.” 

Ross is a Fortune 500 company and the largest off-price apparel and home fashion chain in the United States with 1,409 locations in 37 states, the District of Columbia, and Guam. The company also operates 213 dd’s DISCOUNTS® in 16 states. Ross (including dd’s discounts) recently opened 92 stores for a total of 1,627 locations in the US. The goal for Ross is to reach 2,500 total stores in the future, Asher says. 

Asher added, “It continues to be a challenge in today’s market for investors to find quality, stabilized retail investments in ‘A’ locations to purchase in Los Angeles County. We expect that the market for single-tenant and two-tenant assets in quality locations, especially those leased to name brand tenants that are internet-resistant and have long-term leases, will remain strong in Southern California throughout 2018.”