The hottest spot of local real estate, at the Santa Clarita Valley’s busiest intersection, went on the market Wednesday in a rare listing of more than 12 acres for mixed residential and commercial use in the heart of the city where a Kmart once stood.
The site currently contains fast food restaurants, a furniture store, a vape shop and several other businesses.
The Irvine-based Hanley Investment Group Real Estate Advisors, specializing in retail property sales, announced Wednesday it was awarded the listing of a 12.6-acre former Kmart-anchored shopping center, on the southwest corner of Bouquet Canyon Road and Valencia Boulevard.
“It’s common practice that bigger properties don’t have a price tag, especially one like this,” Hanley Vice-President Lee Csenar told The Signal.
“It’s at the busiest intersection in Santa Clarita,” he said, noting the intersection sees 100,000 cars per day.
“There is going to be a tremendous amount of interest for both commercial and residential developers,” he said.
The property, owned by a private family, is within Santa Clarita’s mixed-Use zoning corridor, which allows up to 30 units per acre for residential with ground-floor commercial, according to Hanley.
In a news release announcing the listing, Hanley Executive Vice President Carlos Lopez said: “The offering provides a buyer with the rare opportunity to purchase a development site of this size within the core of Santa Clarita.
“Due to the short-term nature of the leases in place and the mixed-use zoning, there is tremendous flexibility and the potential to be creative for potential developers and the city of Santa Clarita,” he said.
“For example, the property could be developed as 100 percent retail or a combination of retail and residential.”
Lopez and Csenar are the exclusive listing agents and are marketing the property for sale unpriced.
The former Kmart site houses a 120,559-square-foot shopping center built in 1972. A furniture store now occupies the building. A Taco Bell is located on a single-tenant outparcel as part of the offering.
“All existing leases will expire by 2024 – except Taco Bell’s lease – allowing an investor to collect annual cash flow while obtaining entitlements,” said Csenar. “Taco Bell’s lease expires in 2032, which allows an investor to individually parcel and potentially sell it separately to take advantage of historically low cap rates.”
According to its listers, the property benefits from being located near entertainment, employment, education, shopping and dining options including Westfield Valencia Town Center, which has over one million square feet, 200 stores, and two outdoor shopping districts.
College of the Canyons, a 153-acre community college with 17,150 student enrollments, and California Institute of the Arts, a private arts college known as CalArts with 1,500 student enrollments, are “also nearby,” according to Lopez and Csenar.
The property, according to them, is near Henry Mayo Newhall Hospital, which they describe as a 238-bed hospital and trauma center and one of Santa Clarita’s largest employers with 1,948 employees, and Six Flags Magic Mountain, the top employer in Santa Clarita with 3,200 employees and four million visitors annually.
“In 2017, the city of Santa Clarita issued 5,782 permits for more than $365 million of new construction. Santa Clarita is strategically positioned with proximity to the San Fernando Valley, Downtown LA, Burbank Airport and LAX,” Lopez said.
Csenar adds, “Santa Clarita has the tightest real estate market in Los Angeles County with the lowest vacancy rates in apartments, commercial space, and industrial space.”