A 39.3k sf building occupied by Walgreens in Pasadena has sold as a fee-simple property for $23 mil in a deal that closed with a cap rate of 4.9%. Built in 1949, the freestanding building sits on 0.79 acres at 310 South Lake Ave, at the intersection with Del Mar Blvd.
The first and second floor of the building (totaling 27k sf) is leased to Walgreens until 2027. Walgreens subleased the second floor to Sit ‘n Sleep for a 14.1k sf store. The building’s 12.3k sf basement space is leased to Premier Dental Care Group. The sale also included a portion of the parking lot behind the property and the use of the adjacent reciprocal parking managed by the City of Pasadena.
The property is situated directly across the street from the Shops on Lake Avenue Mall, anchored by Macy’s, Trader Joe’s and T.J.Maxx. Additional retailers along South Lake Ave include Ann Taylor, LA Fitness, Pacific Sales, Pavilions, Pet Food Express, Pier 1 Imports, Pottery Barn Kids, Ross Dress for Less, Talbots and Williams Sonoma.
Carlos Lopez and Lee Csenar with Hanley Investment Group Real Estate Advisors represented the seller, AEGON USA Realty Advisors LLC of Cedar Rapids, IA. The buyer, a private investor based in Beverly Hills, was repped by John D. Repstad of Realty Advisory Group Inc. of Los Angeles.
“The sale represented an extremely rare opportunity for an investor to purchase 39.3k sf of prime retail along South Lake Avenue in the heart of Pasadena,” said Lopez. “This is a secure and stable generational asset with a long-term triple-net lease with Walgreens representing 85 percent of the annual income. There is an additional triple-net lease with Premier Dental Care Group, which has been successfully operating at the property since 2013.”
The revered South Lake Avenue corridor consists of 12 blocks of shopping and dining that includes over 600 businesses that draw from the region, including nearby cities of Arcadia, Eagle Rock, La Cańada Flintridge, South Pasadena and San Marino. Within three miles of the site, the average household income is $117,600 with 38% of the households averaging $100,000 or more. More than 560,000 people live within a five-mile radius of the property. The population is also highly educated with 64 percent of the residents with a bachelor’s degree or higher within one mile and 7.7 msf of Class A office that continues to draw employers to Pasadena, creating office demand.
The property is also located less than one mile from the Metro Gold Line stations at Lake Station and Del Mar Station, connecting Pasadena to Downtown Los Angeles, San Fernando Valley, San Gabriel Valley, Santa Monica/West Side, the South Bay, Downtown Long Beach, and East Los Angeles. The Metro Gold Line boasts over 50,000 daily riders per weekday and 34,000 daily riders on the weekends.