Two multi-tenant pads totaling 13.8k sf of space at the Walmart Supercenter in Lancaster have sold for a total price of $6 mil ($435/sf). Built in 2003, the buildings are 100% occupied.
Pad B, a 7.5k sf building, is occupied by AT&T, Papa John’s, Advance America and Mi Ranchito Mexican Bar and Grill and located at 1721 East Avenue J in Lancaster. Pad G, a 6.3k sf building occupied by Panda Express, Smoke Rings, GameStop and It’s a Grind, is located at 44421 20th Street East in Lancaster.
In addition to Walmart, nearby national and regional credit tenants include Stater Bros, ALDI, McDonald’s, Wells Fargo, Bank of America, Chase Bank, Jack in the Box, Del Taco, Taco Bell, KFC, El Pollo Loco, Wingstop, Goodwill, In-Shape Health Club, Dollar Tree, CVS/pharmacy, 7-Eleven, AutoZone, Subway and H&R Block.
Eric Wohl, Ed Hanley and Andrew Cunningham with Hanley Investment Group Real Estate Advisors represented the sellers, The Niki Group of San Diego and Wood Investments Companies Inc of Costa Mesa. The buyer, a private non-1031 exchange buyer based in Los Angeles, was repped by James Chin of Realtex Properties Inc, of Los Angeles.
According to Hanley, the sale represents the 2nd lowest cap rate over the previous 12 months and the 3rd highest price per square foot over the past 36 months for a multi-tenant property in the Lancaster/Palmdale market.
According to Wohl, 80% of the tenants feature rental increases providing an ideal hedge against inflation and resulting in strong cash flow growth. Additionally, each building is situated on its own parcel allowing for separate sales in the future to maximize value.
“The properties have excellent access and visibility and benefit from the high-traffic location with 30,000 cars per day at the intersection of East Avenue J and 20th Street,” said Wohl. “The shopping center has six points of ingress/egress and large pylon signage. Furthermore, there are over 81,000 people within a three-mile radius.”