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Investors buy retail spot

Ventura buyer gets Canyon Country retail property for close to asking price

Posted: June 28, 2012 1:55 a.m.
Updated: June 28, 2012 1:55 a.m.

This Canyon Country retail building was part of a recent purchase by 11730 Ventura Blvd LLC.

 

By Jana Adkins
Signal Business Editor
A Canyon Country retail building not only secured a long-time tenant last year, but the property sold for nearly asking price.


Faris Lee Investments announced it completed the sale of the property occupied by Goodwill of Southern California on Soledad Canyon Road for $4.51 million. The asking price had been $4.56 million.


The buyer was 11730 Ventura Blvd LLC, a private 1031 exchange buyer from Ventura represented by Illi Commercial Real Estate.


The closing cap rate was 7 percent, which according to CoStar is the lowest cap rate for a Goodwill-occupied property in California for the past seven years.


It was a strong price with a lower cap rate based on the annual returns from the tenant, according to a spokesman for Faris Lee Investments. The tenant recorded the highest store grand opening for a Goodwill in the Southern California chain when it opened in late 2011.


“Faris Lee positioned the proven strength of the tenant, the long-term lease and opening success of the store as our marketing strategy,” said Christopher Tramontano, managing director of Faris Lee Investments.

 
“There was significant offer activity and we sold the asset at very close to the asking price, and at a record-breaking low cap rate,” he said.


The Goodwill has a 10-year triple net lease on the property, which makes it responsible for all ongoing expenses, taxes, utilities, insurance, maintenance and repairs while the new owner collects monthly rental income. The buyer is responsible for the roof and structure of the building.


The Goodwill has a 10-year base term lease with two five-year options, Tramontano said.


“A single tenant property such as this often goes unnoticed by investors because of the non-profit nature of the tenant,” said Donald MacLellan, senior managing partner with Faris Lee Investments.


“However, Goodwill stores have historically been very successful and the challenge in our marketing outreach was educating potential buyers about the historical stability as well as the success of the other stores in the immediate market area.


This Goodwill store opened in January 2012 and had one of the most successful store openings in its Southern California chain.”


Renovated by the El Segundo-based Paragon Commercial Group in 2011, the 21,600-square-foot property is located on 1.08 acres and is located at 18901 Soledad Canyon Road. Based on the sales price, the property sold for nearly $209 per square foot, slightly before the listing price of $211 per square foot.


The renovation included an upgraded façade, new roof and HVAC system, and enhanced common areas and landscaping.


There are over 26,000 consumers within a 1-mile radius of the property with an average household income over $78,000, according to listing information posted on LoopNet, the online commercial real estate listing service. The net operating income for the property was stated to be $319,333.


Some 53,100 vehicles per day pass the retail property, said a spokesperson with Faris Lee.


MacLellan and Tramontano, of Faris Lee Investments represented the seller, along with Paragon Commercial Group and Adam Fisher at Centerra Retail Group who provided the local leasing market expertise.

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