IRVINE, CALIF. – Hanley Investment Group Real Estate Advisors, one of the most dominant retail investment groups in the United States and a market leader in the sale of retail properties, announced today the sale of a single‐tenant LA Fitness in Fontana, Calif. The property was sold at list price which represented a 6.75% capitalization rate, the lowest for a single‐tenant health club in the Inland Empire.
The single‐tenant LA Fitness is located at 16289 Sierra Lakes Parkway in Fontana, Calif. Built in 2008, the 45,000‐square‐foot prototype health club is situated on 4.08 acres and is a part of the 880,000‐square‐ foot Sierra Lakes Commercial Corridor developed by the Lewis Group of Companies. Significant neighboring tenants include Costco, The Home Depot, Lowe’s, Ralphs Fresh Fare, Petco, Walgreens and Sierra San Antonio Medical Plaza. The property is located directly across the street from the 1,850‐unit master‐planned community of Sierra Lakes, including an 18‐hole championship golf course, clubhouse and restaurant. The sale featured a 15‐year initial lease term with less than 10 years remaining at the time of sale.
The Seller, the Lewis Group of Companies based in Upland, Calif., was represented by William B. Asher, Edward B. Hanley, Patrick G. Kent and Eric P. Wohl of Hanley Investment Group. The buyer, a private investor based in Roseville, Calif., was represented by Gregg Thompson of Placer Properties.
“A single tenant health club can be one of the more challenging types of properties to sell due to its specific build out and special use; pool, locker rooms, basketball courts, etc. We were able to procure a highly qualified 1031 exchange buyer that released a substantial non‐refundable deposit in a short time period ensuring a smooth closing for both parties,” said William B. Asher, managing director at Hanley Investment Group.
“We were able to promote the limited health club competition in the area, solid existing membership base, combined with the strong credit of LA Fitness (#1 health club in the nation) to generate a flurry of initial offers upon commencing marketing, “ said Eric P. Wohl, a senior vice president at Hanley Investment Group. “Additionally, this particular location featured a rare absolute NNN lease which was a big selling point to prospective investors seeking a hands‐off, minimal management investment.”
Asher adds, “There is a continued demand from investors for single tenant investments leased to quality tenants in good locations. The LA Fitness sale is another prime example that the investment market will continue to pay a premium and have an abundant appetite for these types of assets in the foreseeable future.”