HFF Brokers Suburban LA Shopping Center Sale
- Oct 27, 2017
Plaza Del Sol, a 165,500-square-foot grocery-anchored shopping center in Burbank, Calif., has come under new ownership with the help of HFF. Acting on behalf of Tourmaline Capital, the commercial real estate and capital markets services provider sold the combination retail and industrial property to an undisclosed investor.
Originally developed in 1984, the property at 10950 Sherman Way operated as a Costco store until 2005, when it emerged from a retrofit as a mixed-use center featuring street-facing retail with an uncharacteristic offering in the back: industrial space. The investment community was more than a little intrigued.
“We had a strong response because it was a functional asset,” Gleb Lvovich, managing director with HFF, told Commercial Property Executive. “The retail portion was 100 percent leased with strong sales performance across the board. On the industrial side, the Burbank industrial market has a vacancy rate of less than 1 percent, and rents have been growing quickly.” Sited on 11.4 acres, Plaza Del Sol also encompasses space for a future pad development. The property’s full tenant roster was an obvious magnet for hopeful buyers, as was the anchor tenant, Vallarta Supermarket, a chain specializing in Latin foods.
THE ALLURE OF ETHNIC RETAIL
A top-performing grocery store occupying 45,000 square feet at Plaza Del Sol, Vallarta Supermarket is, as described in HFF’s offering memorandum on the property as well positioned to capitalize on the population growth and spending power of the local consumer in California.
“Investors have always had a curiosity about ethnic retail, they knew it performs well, but it was hard for them to understand the operations. The majority of ethnic centers have historically been owned by private investors for that reason, but that is starting to shift as institutional capital becomes more familiar with the performance of the product type,” Lvovich said. He cites Federal Realty Investment Trust’s recent $345 million investment in a joint venture with Primestor Development, an owner and developer of premier retail properties serving the urban Latino communities of Southern California, as a prime example of this trend.
“Ethnic retail will continue to perform well and be in strong demand,” added Lvovich. “Additionally, we will see more and more mixed-use environments within retail (like Plaza Del Sol).”
Photo courtesy of Patrick Tang