Supply of Product Expected to Increase in 2017; Aggressive Buyers Still Active
CORONA DEL MAR, Calif. – (RealEstateRama) — Hanley Investment Group Real Estate Advisors, a nationally-recognized boutique real estate brokerage and advisory firm specializing in the sale of retail properties, announced today the company closed out the year 2016, with the sale of 82 retail properties totaling nearly $540 million.
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“It was a great year for Hanley Investment Group, one of the best ever,” said Ed Hanley, president of Hanley Investment Group. “Similar to last year, we closed deals in 20 different states this year, ranging from anchored shopping centers to multi-tenant retail strip centers and single-tenant properties. We worked with publicly-traded real estate investment trusts, family trusts, partnerships and private investors. Approximately 45 percent of our closings in 2016 were outside of California, which speaks to investors willingness to seek investment opportunities in secondary or tertiary markets across the country to meet their investment requirements as yields for single-tenant and multi-tenant retail in primary markets continued to compress.”
Some of the multi-tenant highlighted deals include the sale of two grocery-anchored shopping centers in Santa Clarita, Stevenson Ranch Plaza, which sold for $72.5 million, and Bouquet Center (price could not be disclosed), both negotiated by Hanley and Senior Vice President Kevin Fryman. Hanley Investment Group also completed the sale of Brookhurst & Adams in Huntington Beach, Calif., which sold for $18.5 million, negotiated by Hanley, Executive Vice President Bill Asher and Associate Eric Vu; Montclair Plaza North in Montclair, Calif., which sold for $17.9 million, negotiated by Senior Vice President Carlos Lopez and Senior Associate Lee Csenar; Upland Village in Upland, Calif., which sold for $17.2 million, negotiated by Asher and Hanley; Arvada West Town Center in Denver metro area, negotiated by Fryman (price could not be disclosed); and Raley’s Ukiah Crossroads in Ukiah, Calif., which sold for $15.1 million, negotiated by Hanley and Fryman. Hanley Investment Group also sold a development site in Malibu for $31 million, negotiated by Lopez in the final days of December.
In addition to grocery- and drug-anchored shopping centers and multi-tenant retail strip centers, Hanley Investment Group sold numerous single-tenant properties located throughout the U.S. “The high number of single-tenant retail investment property sales was driven by private investors trading out of multifamily properties as well as multi-tenant retail properties,” said Hanley. “We expect to see this trend continuing in 2017. Single-tenant net-leased properties offer a passive income stream that really plays well to people that are exchanging out of high management assets and want a no management asset with approximately the same type of return.”
Some of Hanley Investment Group’s noteworthy deals include the sale of Walgreens, Petco, Wendy’s, El Pollo Loco ground lease, O’Reilly Auto Parts, 7-Eleven, and Black Bear Diner, many achieved historic low cap rates. For example, in March 2016, Hanley Investment Group’s Senior Vice President Pat Kent and Asher represented the seller in the sale of a single-tenant absolute net-leased Walgreens property in Huntington Park, Calif. The purchase price was $11.85 million, which represented a cap rate of 4.22 percent, the lowest cap rate ever for a single-tenant Walgreens in Los Angeles County priced over $10 million and one of the lowest cap rates for a fee-simple Walgreens nationwide. The Walgreens lease had more than 22 years remaining on the initial 30-year term.
In April, Hanley Investment Group’s Executive Vice President Eric Wohl represented the seller in the sale-leaseback of a Wendy’srestaurant in La Mesa, Calif. The property sold for $4,125,000, representing a record-setting cap rate for a fee-simple Wendy’s sale-leaseback in California. The sale included both the land and the building and featured a brand new 20-year absolute NNN lease with increases every five years.
In June, Senior Vice President Jeremy McChesney completed the sale of a single-tenant corporate-guaranteed 7-Eleven ground lease in Culver City, Calif. with over 11 years remaining on the primary lease term. The purchase price was $2,700,000, representing $1,823 per square foot (PSF) and a cap rate of 3.56%, the lowest cap rate nationwide for a 7-Eleven property that closed in 2016 at the time of the sale, according to CoStar.
In August, Asher and Hanley represented the sale of a single-tenant Petco in Redondo Beach, Calif. The sales price of $7,630,000 represented a cap rate of 4.5%, a record low cap rate for a single-tenant Petco in Los Angeles County. “We generated over 10 offers in the first two weeks of marketing, providing clear evidence that a flight to quality is what investors are seeking in today’s retail investment market,” said Asher.
“If January’s activity of upcoming new listings and multitude of buyer requirements is any indication to how the rest of the year will go, we know it is going to be another great year,” noted Hanley.
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a retail investment advisory firm with a $5 billion transaction track record nationwide, who works closely with individual investors, lending institutions, developers, and institutional property owners in every facet of the transaction to ensure that the highest value is achieved. For more information, visit www.hanleyinvestment.com.
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