In the summer, Hanley Investment Group negotiated the sales of 3 high profile grocery-anchored shopping centers in Southern California within 120 days of each other, totaling nearly $77 million. The Landing, a 44,289-square-
Additionally, Hanley represented the buyer and seller in the $22.85 million sale of The Marketplace in Palm Desert, a 96,463-square-
In December, the surge of retail transactions ranged from single-tenant retail property sales (sale-leaseback portfolio of six Wendy's restaurants in Alabama, a single-tenant Chase bank in Riverside, California, and a single-tenant 89,249-square-
"There were a flurry of closings at the end of 2012 as sellers attempted to avoid the potential higher capital gains taxes on property sales," said Hanley. "In 2013, we expect to see sellers focused more on exchanging after evaluating the new tax laws.”
Hanley continues, "As the industry works through the aftermath of the elections and endless fiscal cliff discussions, momentum will build rapidly. Watch for increased investor confidence, which will lead to higher demand for retail investment opportunity. I am anticipating a very busy year for retail property sales."
"With minimal new supply and continued increasing demand, retail vacancy rates should experience some downward pressure in 2013," Hanley added.
Eric P. Wohl, president of HIG NNN, a division of Hanley Investment Group specializing in the sale of single-tenant net-leased properties, said that the single-tenant net-lease sector of the market is still one of the hottest segments within commercial real estate right now. Lack of supply, record low interest rates, and slower tenant expansion plans are creating a feeding frenzy for corporately-
In 2012, Hanley Investment Group set multiple records for the lowest capitalization rate for single-tenant drug stores. In April, Hanley Investment Group achieved the lowest cap rate for a Walgreens in over 3 years in San Bernardino County with the sale of the Walgreens in Victorville, Calif., at a 5.69% cap rate, sales price $7,469,000. In August, Hanley Investment Group sold a single-tenant CVS/pharmacy ground lease in Fresno, Calif., at the lowest cap rate for all single-tenant drug stores in the nation in 2012 at a 5.25% cap rate, sales price $5,240,000.
Hanley Investment Group also achieved record low cap rate sales for single-tenant banks three years in a row. Most recently in June, Hanley Investment Group achieved a 5.1% cap rate for a Bank of America in Lancaster, Calif., sales price $2,600,000. In the single-tenant fast-food restaurant category, Hanley Investment Group achieved the lowest cap rate in 5 years for a McDonald’s in Orange County with the sale of a single-tenant McDonald’s ground lease in Santa Ana at a 4.25% cap rate, $2,825,000 sales price.
"Capitalization rates for single-tenant assets have dropped lower than where they were in 2006-2007, which truly speaks to the high demand for net lease properties and the lack of alternative investments in the marketplace,"
Carlos J. Lopez, president of HI Urban Retail Advisors, which specializes in the sale and advisory of high profile mixed-use and urban street retail properties, said, "We have seen pricing of quality urban and street retail buildings surpass those at the high water marks of 2006-2007. I anticipate that this pricing trend will continue during 2013, as there is a finite supply of this asset type available and a growing buyer pool, both foreign and domestic, that seek to acquire these properties."
Last month, Lopez represented the seller on two landmark retail buildings at 39 & 43 East Colorado Boulevard in the Old Pasadena District. The buildings, which total 7,200 square feet and were 100% leased, sold for $3.7 million at a cap rate of 5.95%. The last notable retail building to sell along Colorado Boulevard in Old Pasadena, which housed Tiffany & Co., H&M, Abercrombie & Fitch, just 2 blocks away, sold for $37 million in 2006. Lopez negotiated the sale of that building as well. Currently, Lopez has in escrow the Ralphs-anchored retail center at Market Lofts in downtown Los Angeles and Hollywood Walk of Fame's landmark mixed-use building, 6904 Hollywood Boulevard in Hollywood.
"With one of the largest databases in the industry and a strong inventory of on-market and off-market opportunities, Hanley Investment Group has been one of the most active retail investment brokers in the United States in the last two years,” Wohl stated. "Outside of California, Hanley Investment Group negotiated 4th quarter 2012 sales of grocery/drug-
"With just a few weeks into the new year, Hanley Investment Group already has more than $100 million in escrow, plus a multitude of buyer requirements to fill," said Hanley. "If January's volume of activity is any indication to how the rest of the year will go, we know it is going to be another great year!"
For more information, visit Hanley Investment Group's website at www.hanleyinvestment.com or call (949) 585-7610.