Single-Tenant Petco Property in Redondo Beach Sells for $7.6 Mil at 4.5% Cap Rate
A single-tenant, net-leased coastal property occupied by Petco in Redondo Beach traded hands in a recent $7.63 mil transaction. The 17.2k sf property, located at 537 North Pacific Coast Hwy, closed at a price per sf of $444 and a cap rate of 4.5%, said to be a record low cap rate for a single-tenant Petco in Los Angeles County.
Built in 1981, the Petco building sits on a 1.07-acre parcel in the King Harbor Plaza, shadowed anchored by Smart & Final. Petco has occupied the building for 22 years and recently signed a 10-year lease extension.
Ed Hanley and Bill Asher with Hanley Investment Group, along with Joe of Voit Real Estate Services, represented both the seller and buyer in the 1031 exchange transaction. The seller was The Beacon Group Inc, a California Corporation, based in Orange County. The buyer was a private corporation based in Los Angeles.
The listing generated over 10 offers in the first two weeks of marketing. “Due to the high level of demand based on the prime coastal South Bay location and Petco’s long-term historical occupancy and recent lease extension at the location, we structured a best and final offer process that resulted in a final sales price 25 basis points better than the original list price,” commented Hanley.
“This property fulfilled many investors’ acquisition criteria requirements,” said Hanley. “It is a well-established, successful location with high traffic count, great co-tenancy and retail synergy in the area; stability of Income; excellent visibility and identity; and irreplaceable coastal location with strong demographics and nearby residential.”