Historic Low Cap Rate Beats Previous Record by Over 50 Basis Points Nationwide!
IRVINE, CALIF. – March 3, 2015 – (RealEstateRama) — Hanley Investment Group, a nationally-recognized boutique real estate brokerage and advisory firm specializing in retail property sales, announced today that Ed Hanley, Kevin Fryman and Eric Wohl negotiated the sale of an 88,000-square-foot Kohl’s, located in the Los Angeles area. The single-tenant triple-net leased property sold for $21,950,000, representing a historic national record-breaking low cap rate of 4.80 percent.
“According to our CoStar research, this sale represented the all-time lowest cap rate ever for a single-tenant Kohl’s in the U.S.,” said Ed Hanley, president of Hanley Investment Group. “The previous record-holder was for a Kohl’s in Redondo Beach, Calif. that sold in November 2013, and the cap rate for this Kohl’s sale beat out the Redondo Beach record low cap rate by more than 50 basis points.”
Hanley also added that this Kohl’s transaction represented the lowest cap rate for a single-tenant transaction over $20 million located in a non-urban setting. According to Hanley Investment Group’s Senior Vice President Kevin Fryman, Kohl’s had 14 years remaining on the initial term with strong increases and options to extend. “The record low cap rate was due to the lack of inventory and the fact that cap rates are continuing to compress, combined with the long-term lease, Kohl’s investment grade credit and its excellent location.”
Hanley Investment Group’s Executive Vice President Eric Wohl adds, “The opportunity to buy such a quality single-tenant triple-net asset is rather rare, and this is certainly a trophy location with an average household income of approximately $102,000 within a 3-mile radius.”
The buyer was a private northern California 1031 Exchange investor. The seller was a Los Angeles-based private investor represented by Ed Hanley, Kevin Fryman and Eric Wohl of Hanley Investment Group.
Hanley adds that the company is currently marketing numerous single-tenant investment opportunities including a single-tenant triple-net 55,000-square-foot Best Buy in Sherman Oaks for $41,740,000, with 13 years remaining on its corporate lease. The property is located adjacent Gelson’s Market at the corner of Van Nuys Boulevard and Milbank Street in Sherman Oaks.
“Single-tenant net-leased demand is at a historic high due to the lack of quality inventory in the market and strong pent-up buyer demand,” said Hanley. “It’s probably the number-one sought-after investment product today for the private capital market, which is driving up prices. Although some new construction is adding to the supply, we still expect the net-lease sector to remain strong throughout 2015. Investors will continue to be attracted to quality net-lease properties due to the good cash flow, tax benefits and limited management.”
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.hanleyinvestmentgroup.com.