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 completed the sale of a brand-new construction, single-tenant Smart & Final Extra! and a single-tenant property occupied by dd’s Discounts at the Antelope Valley Plaza, a 127,000-square-foot grocery- and drugstore-anchored shopping center at the Antelope Valley Freeway on/off-ramp in Lancaster, California. The two single-tenant properties were purchased by two individual private 1031 exchange buyers in separate transactions. The combined sales price was $11.38 million.
Hanley Investment Group’s Vice President Sean Cox, Executive Vice President Bill Asher, Vice President Alexander Moore and Executive Vice President Kevin Fryman represented the seller, PacWest Management Inc., in partnership with Evergreen Development Company, for the sale of the single-tenant Smart & Final Extra! property. The Hanley Investment Group team, comprising Cox, Asher, Moore and Fryman, also represented the seller, Pac West Management, Inc., in the sale of dd’s Discounts.
“We generated eight competitive and qualified offers for the single-tenant, 32,200-square-foot Smart & Final-occupied property and procured a Los Angeles-based 1031 exchange buyer seeking a year-end closing,” Cox stated. “We negotiated a two-week contingency period and closed escrow in 25 days.”
Built in 1979 and renovated in 2023, the new construction Smart & Final Extra!-occupied property sits on 1.85 acres at 2058 West Avenue J, adjacent to a top-4%-performing CVS Pharmacy nationwide at the Antelope Valley Plaza, according to Placer.ai. Smart & Final Extra! has a new 15-year corporate lease.
“Smart & Final invested a substantial amount of their own capital into the renovation of the new Lancaster store, showing their commitment to the location and trade area,” said Asher. “The real estate is an ‘A’ location at a dominant intersection in the trade area with 60,000 cars per day. The store is well positioned for long-term future success and a stable and secure investment purchase for the buyer.”
Smart & Final operates 255 stores under Smart & Final Extra! and Smart & Final banners in California, Arizona and Nevada. In May 2021, Smart & Final was acquired by Bodega Latina Corp., the parent company of El Super and Fiesta Mart, and a subsidiary of Mexican supermarket operator Grupo Comercial Chedraui. Progressive Grocer ranked Grupo Comercial Chedraui #40 in its 2022 ranking of North America’s top 100 food and consumables retailers.
In the second transaction, Hanley Investment Group procured an all-cash Southern California-based 1031 exchange buyer who owned other properties in Lancaster. According to Cox, “We generated multiple all-cash offers on an off-market basis, with a short escrow timeline to help achieve a year-end closing for the seller for the single-tenant dd’s Discounts at the Antelope Valley Plaza.”
Moore notes, “We negotiated and structured the buyer opening escrow non-contingent and closed escrow within seven days from signing the purchase sale agreement to secure a year-end closing for the seller and assist the buyer with satisfying their 1031 exchange.”
Located at 2038 West Avenue J on a 1.64-acre parcel, the 24,000-square-foot single-tenant dd’s Discounts has less than three years remaining on the initial lease term. The dd’s Discounts is ranked #1 by traffic of stores within a 30-mile radius, according to Placer.ai.
Ross Stores, Inc., an S&P 500, Fortune 500, and Nasdaq 100 (ROST), operates dd’s Discounts and Ross Dress For Less. dd’s Discounts has 347 locations in 22 states throughout the U.S. and offers a more moderately-priced assortment of first-quality, in-season, name brand apparel, accessories, footwear, and home fashions for the entire family at savings of 20% to 70% off moderate department and discount store regular prices every day.
Antelope Valley Plaza is situated immediately adjacent to the 14 Freeway at Avenue J and 20th Street on/off-ramps and one block west of the 420-bed acute care Antelope Valley Hospital, one of only 14 trauma centers in Los Angeles County. The property is also near a high-performing Home Depot, Walmart Supercenter and many hotels.
In addition to anchors Smart & Final Extra!, CVS Pharmacy and dd’s Discounts at the Antelope Valley Plaza, other tenants include AT&T Wireless, Supercuts and Hallmark. CVS Pharmacy is ranked by traffic in the 96th percentile nationwide, according to Placer.ai. Antelope Valley Plaza is situated adjacent to the future 100-acre medical main street redevelopment project, which aims to capitalize on the 100 acres of land surrounding the existing Antelope Valley Hospital, re-purposing it for mixed-use facilities that integrate health care, health food stores, restaurants, and workout facilities bringing thousands of jobs to the Antelope Valley. The property is also close to Antelope Valley College, which has grown to a student population of approximately 16,000.
The Antelope Valley is home to Edwards Air Force Base, America’s largest U.S. military installation. Major area employers include the world’s largest private aerospace companies, including Boeing, Lockheed Martin and Northrop Grumman. Lockheed Martin is the largest defense contractor in the Antelope Valley (3,700+ employees) and Northrop Grumman, California’s largest employer, has a local workforce of 2,100 employees. It is predicted that Antelope Valley will experience a 37% job growth over the next 10 years.
Asher commented, “Although retail investment sales volume was significantly down in 2023, mainly due to higher interest rates, Hanley Investment Group had one of its best years in the company’s 19-year history. With the Fed’s comments in mid-December 2023, specifically the three projected rate cuts in 2024, with the first rate cut as early as March 2024, we are optimistic transaction activity and investor demand will substantially increase in 2024.”