LOS ANGELES—Two retail centers in Los Angeles County have sold for a total of $29 million, illustrating increasing demand for shopping centers in the Los Angeles market. The Sierra Commons in Palmdale and the Pacific Plaza in Torrance, which total 128,000 square feet, were the two properties to trade hands.
“According to Costar, we have seen a 15% increase in transaction volume and a 20 basis-point compression in cap rates for retail properties that have sold over $10 million in Los Angeles County, comparing the 12-month periods from 3rd quarter 2013 to 3rd quarter 2014,” Bill Asher, the managing director for Hanley Investment Group who served as a broker in the two transactions, tells GlobeSt.com.
Located at 39626 10th Street in Palmdale, Sierra Commons sits on nearly 10 acres with 104,811 square feet of retail space. Grae Palmdale Landlord sold the property to an investment firm operating under Progression Real Estate Investments for $18.3 million in a leasehold-interest sale. The property was 90% occupied at the time of the sale with a tenant mix that includes national retailers, like Ashley Furniture, Michaels, BevMo! and The Coffee Bean & Tea Leaf. Asher represented the seller, along with Hanley Investment Group SVP Patrick G. Kent.
Located at 2382, 2390 & 2396 Crenshaw Blvd., in Torrance, Pacific Plaza is a 23,438-square-foot multi-tenant property. The Holt Group sold the property to Los Angeles-based Metro Properties for $10.7 million as part of a 1031 exchange. The property is 100% leased to a tenant mix that also includes national retailers, such as Subway, H&R Block and the UPS Store. Asher represented the buyer and the seller in the transaction, along with Hanley Investment Group SVP Jeremy S. McChesney on the buyer side, and Kent and SVP Kevin T. Fryman on the seller side.
“Investor demand is at an unprecedented level right now. With the sustained volatility of the stock market, retail shopping centers are becoming an increasingly popular alternative investment opportunity,” says Asher. “There continues to be more buyers than sellers in today’s market as supply remains limited for new retail investment opportunities.”