Hanley Investment Group Concludes December with Sale of 10 Retail Properties, $315 Million for the Year

January 27, 2014

Improving Retail Market to Continue in 2014

IRVINE, CA – January 27, 2014 – (RealEstateRama) — Hanley Investment Group Real Estate Advisors, one of the most dominant retail investment groups in the United States and a market leader in the sale of retail properties, announced today the company closed out the month of December 2013, with the sale of 10 retail properties totaling nearly $61 million. Hanley Investment Group achieved many milestones throughout 2013, and completed the year with the sale of 1,431,320 square feet of retail space for total consideration of more than $315 million.

In Los Angeles County, Edward B. Hanley, William B. Asher and Kevin T. Fryman of Hanley Investment Group negotiated the sale of La Verne Courtyard, a 84,796-square-foot shopping center anchored by Orchard Supply Hardware and Office Depot at 2204-2278 Foothill Boulevard in La Verne, Calif. The purchase price was not disclosed. Situated on the southwest corner of Foothill Boulevard and White Avenue, the center is located on 7.70 acres and was built in 2000. According to Hanley, “La Verne Courtyard offered a unique value-add opportunity to own a well located community shopping center at the prominent intersection in the trade area. It was a challenging sale as we were able to navigate a successful transaction for both parties with the assumption of an undesirable loan and an asset where both anchors had shorter term leases.” Other tenants included Citi Financial, Pizza Hut, Rubio’s Baja Grill, Quiznos, and Magic Wok. The buyer and seller were represented by Asher, Fryman and Hanley. The buyer was a private investor based in Beverly Hills, Calif. The seller was a private investor from San Clemente, Calif.

In Granada Hills, Calif., Hanley and Asher negotiated the sale of Knollwood Plaza, a 23,922-square-foot shopping center at 11846-11862 Balboa Boulevard. The purchase price was $10,565,000. Asher said, “Knollwood Plaza was a rare San Fernando Valley multi-tenant retail center to hit the market for sale in 2013, which generated a tremendous amount of demand because of the affluent surrounding demographics, in addition to 100% occupancy and excellent frontage along Balboa Boulevard, one of the main north/south arterials in the Valley.” The center was originally built in 1973, and remodeled in 2013. Situated on 3.11 acres, the property includes Starbucks, Curves, Pacific Dental, State Farm Insurance, The UPS Store, and Bank of America (ATM). The buyer, a private investor based in Los Angeles, Calif., was represented by Alex Needleman of Rosano Partners of Los Angeles. The seller, represented by Hanley and Asher, was Knollwood Balboa L.P. of Los Angeles.

In Cerritos, Calif., Hanley and Jeremy McChesney negotiated the sale of Big 5 Plaza, located at 11310-11360 183rd Street. The purchase price was $4,650,000. The 15,568-square-foot retail center, built in 1985 on 1.3 acres, is anchored by Big 5 Sporting Goods and was 100% occupied by four tenants at the time of the sale. Other tenants include Subway, Castlehead Escrow and Providence Speech and Hearing. According to McChesney, “The below market rents offered excellent upside potential to increase cash flow in the future at an unparalleled location in Cerritos.” McChesney and Hanley represented the buyer and seller. The buyer was a private investor based in Vernon, Calif. The seller was a private investor from Los Angeles.

In Orange County, Hanley and Eric P. Wohl negotiated the sale of a 4,830-square-foot retail center located at 2800 Harbor Boulevard in Costa Mesa, Calif. The property sold for $3,000,000, representing $621 per square foot. The center, built in 1995 on 0.54 acres, was 100% occupied by Yoshinoya, AT&T and GoldMax at time of the sale. The center is located at a signalized location at the northeast corner of Harbor Boulevard and Adams Avenue, adjacent to Orange Coast College. Wohl stated, “This property offers the buyer upside potential with affluent demographics in an irreplaceable Orange County location.” The buyer, a private investor based in San Clemente, Calif., was represented by Dennis Vaccaro of Faris Lee Investments in Irvine, Calif. The seller, represented by Hanley and Wohl, was a private investor from Jackson, Wyo.

Carlos Lopez of HI Urban Retail Advisors, a division of Hanley Investment Group, with Hanley and Wohl, negotiated the sale of The Plaza Irvine, a high profile 8,489-square-foot retail component of three 15-story, luxury residential condominium buildings totaling 307 units, located at 6000-6280 Scholarship Drive in Irvine, Calif. The purchase price was $3,725,000. The retail center, built in 2009, was 100% occupied at the time of the sale and included Phans55, Avocado Café, Fukada, Barry’s Bootcamp and Plaza Cleaners. Wohl said, “Located off of heavily traveled Jamboree Road and Campus Drive, the retail property offered the buyer a rare opportunity to purchase in Irvine.” The buyer, a private investor based in Newport Beach, Calif., was represented by Wohl. The seller, represented by Hanley and Lopez, was Marshall Property & Development, also from Newport Beach.

In San Bernardino County in the City of Hesperia, Calif., Asher and Jeff Hauber negotiated the sale of a 5,000-square-foot pad to Stater Bros.-anchored shopping center located at 14380 Main Street. The purchase price was $1,330,000, representing a cap rate of 6.77%. The grocery-anchored shopping center was 100% occupied at the time of the sale. “We generated over 20 offers showing the demand for this type of multi-tenant retail is at historic levels once again, even outpacing the last peak in 2007,” said Asher. The buyer, a private investor based in Torrance, Calif., was represented by Brian Rhie of AB Real Estate in Los Angeles, Calif. The seller, represented by Asher and Hauber, was a private investor from La Habra, Calif.

In Fresno, Calif., Wohl and Hanley negotiated the sale of a single-tenant NNN Smart & Final at 631 H. Street. The purchase price was $6,300,000, representing a 5.75% cap rate, and included both the 17,164-square-foot building on 1-acre of land, in addition to the NNN lease. “The sale continues to show the demand for well-located single-tenant NNN investments in today’s market,” said Wohl. “The investment features a brand new 25-year corporate NNN lease with multiple options to extend. The cap rate of 5.75% is a record low cap rate for a single-tenant Smart & Final.”

Hanley adds that the single-tenant NNN Smart & Final investment provides an outstanding hedge against inflation due to strong rent increases during initial lease term and throughout option periods. “This Smart & Final store has high volume store sales and excellent identity as well as accessibility and frontage along Ventura Avenue,” noted Hanley. The buyer, a private investor based in San Pedro, Calif., who purchased the property in a 1031 exchange and obtained third-party financing, was represented by Sands Investment Group in Santa Monica, Calif. The seller, represented by Wohl and Hanley, was a private investor from San Diego, Calif.

In Buford, Georgia, Fryman, Asher and Hanley negotiated the sale of Hamilton Crossings, a 48,470-square-foot shopping center located at 2725 Hamilton Mill Road. The purchase price was not disclosed. Built in 2006 on 5.83 acres, Hamilton Crossings is located across the street from a Super Wal-Mart-anchored center and in close proximity to Publix, Kohl’s and Home Depot-anchored shopping centers. “With 84% occupancy, the investment offered a great value-add opportunity to lease the remaining space at market rent and increase cash flow for a well located multi-tenant shopping center,” said Fryman. Fryman, Asher and Hanley represented the buyer and seller. The buyer was a Adler Realty Investment, Inc., based in Woodland Hills, Calif. The seller was Westwood Financial Corp. of Los Angeles.

According to Hanley, “The 2013 retail investment market finished with more sales than even the most optimistic analysts predicted at the beginning of the year. The market continued to strengthen as the year went on despite the unsettled economic and political sectors. We saw a record breaking number of closings at the end of the year as private investors sought to take advantage of low interest rates and the limited supply of quality assets. The institutional market was extremely active as well with mergers, portfolio acquisitions and large deals totaling more than $4 billion.”

2014 retail investments will increase steadily as pent up investor demand, which was not satisfied in 2013, will continue to fuel activity, Hanley reports. “As interest rates continue to rise, sellers will evaluate adjusting cap rates upward and give more consideration to selling assets they have held to this point. If the supply of product increases, the result will be an extraordinary year for transactions,” Hanley said.

“With minimal new construction and continued increasing tenant demand, retail vacancy rates will continue to decline in 2014,” Hanley added.

“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 Real Estate Advisors

Built on a solid foundation of performance, integrity and dedication, Hanley Investment Group Real Estate Advisors is a boutique retail investment brokerage firm with a $4+ billion transaction track record that is comprised of innovative specialists delivering unparalleled service and superior results that consistently exceed client expectations. Hanley Investment Group’s expertise, commitment and unwavering focus of putting the client’s needs first have continued to set the company apart in the industry. Hanley Investment Group works closely with individual investors, developers, and institutional property owners in every facet of the transaction to insure that the highest value is achieved. Clients rely on Hanley Investment Group to be the most knowledgeable and trusted source for valuation services, market information and retail property acquisitions and dispositions. For more information, visit the Company’s website at www.hanleyinvestment.com or call (949) 585-7610.