UNION GAP, Wash. — Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm has arranged the sale of a single-tenant, net-leased investment occupied by PetSmart in Yakima County, Washington in an off-market transaction. The sale price was $3.3 million, representing a 6.35% cap rate.
Hanley Investment Group’s Executive Vice Presidents Jeff Lefko and Bill Asher, in association with ParaSell, Inc., represented the buyer from Southern California. The seller was a Florida-based private investor.
“We exclusively represented an all-cash exchange buyer based in Southern California and sourced an off-market opportunity by leveraging an existing relationship with a Florida-based investor,” said Lefko.
“It is interesting how COVID has changed buyer preferences towards net lease properties,” continues Lefko. “Pet stores have become a very attractive net lease investment due to the vast increase in the number of pets due to COVID. We anticipate more single-tenant PetSmart and Petco properties achieving record cap rates over the next year.”
Built in 2000, the 19,677-square-foot PetSmart building is situated on 1.56 acres at 1403 E. Washington Avenue in Union Gap. The single-tenant PetSmart has strong shadow-anchor support from nearby Cabela’s, Ross, Hobby Lobby, ULTA Beauty, Best Buy, T.J. Maxx, Home Depot and Valley Mall and is conveniently located just off Interstate 82 in a thriving retail submarket.
Union Gap is home to one of the largest shopping areas in Central Washington, the largest Ag Museum on the West Coast, and a bevy of local, regional and national dining opportunities. It also offers a central location for hiking, biking, wineries, craft breweries, fishing, winter sports, year-round athletic tournaments of all varieties, plus boasts over 300 days of sunshine annually. In 2019, Yakima County’s population was estimated to be nearly 251,000 and the city of Union Gap’s population was 6,200.
“Last year, pet ownership in the U.S. rose from 67% of households to a record high of 70%, according to the American Pet Products Association (APPA) National Pet Owners Survey,” said Asher. “Pets have played an important role in comforting Americans during the pandemic, which resulted in increased spending on pet food and supplies.”
According to an APPA news release in March 2021, “We have reached a critical milestone, generating $103.6 billion in sales,” said Steve King, president and CEO of APPA. “We are bullish for the coming year, projecting growth of 5.8% – well above the historical average of 3 to 4%. This past year presented a host of challenges that resulted in consumers across the country turning to their pets for comfort and companionship. Interestingly, the product trends we are seeing in the pet care community mirror those of consumers – a desire for a healthier lifestyle, increased focus on fitness, turning to supplements for improved well-being, and technology playing a larger role in everyday life.”
PetSmart operates approximately 1,650 pet stores in the United States, Canada and Puerto Rico, as well as more than 200 in-store PetSmart PetsHotel® dog and cat boarding facilities. The retailer provides a broad range of competitively priced pet food and products, as well as services such as dog training, pet grooming, pet boarding, PetSmart Doggie Day Camp™ and pet adoption.
