A private investor based in San Pedro, CA acquired a single-tenant, NNN Smart & Final property in Fresno for $6.3 mil. The transaction, which came in at a 5.75% cap rate, included both the 17.2k sf building on one-acre of land at 631 H. St, and the NNN lease.
The buyer, who purchased the property in a 1031 exchange and obtained third-party financing, was represented by Sands Investment Group in Santa Monica. The seller, represented by Eric P. Wohl and Edward B. Hanley of Hanley Investment Group, was a private investor from San Diego.
“The sale continues to show the demand for well-located single-tenant NNN investments in today’s market,” said Wohl. “The investment features a brand new 25-year corporate NNN lease with multiple options to extend. The cap rate of 5.75% is a record low cap rate for a single-tenant Smart & Final.”
“The 2013 retail investment market finished with more sales than even the most optimistic analysts predicted at the beginning of the year. The market continued to strengthen as the year went on despite the unsettled economic and political sectors. We saw a record breaking number of closings at the end of the year as private investors sought to take advantage of low interest rates and the limited supply of quality assets. The institutional market was extremely active as well with mergers, portfolio acquisitions and large deals totaling more than $4 billion,” Hanley said.
2014 retail investments will increase steadily as pent up investor demand, which was not satisfied in 2013, will continue to fuel activity, Hanley reports. “As interest rates continue to rise, sellers will evaluate adjusting cap rates upward and give more consideration to selling assets they have held to this point. If the supply of product increases, the result will be an extraordinary year for transactions,” Hanley said.
“With minimal new construction and continued increasing tenant demand, retail vacancy rates will continue to decline in 2014,” Hanley added.