An investment sale of Walgreens at 1550 W Valencia in Tucson traded for $5.7 million ($331 PSF) in an all-cash transaction. The property is a 17,085-square-foot building and was constructed in 1996 and did a lease extension prior to closing.
The seller was Transmark Valencia, LLC (Adam Karon) of Tucson and the investor, Anthony A Palermo and Beverly Hills Properties I, LLC of Milwaukee, WI.
Alvin Mansour, senior vice president investments and senior director and Ned Zivkovic, retail specialist with The Mansour Group of Marcus & Millichap in San Diego represented the seller.
In a written statement, Mansour commented on the retail market, “We are continuing to see high demand for investment-grade, single-tenant assets, but have witnessed increased demand over the past 18 months for higher-price-point, multi-tenant retail centers.”
“Developers have been targeting the San Diego-Mexico border to take advantage of the world's busiest border crossing. More than 21 million people come north annually from the border, spending about $6 billion in shopping each year. This figure is rising rapidly in conjunction with the increasing value of the peso. With $600 million dedicated toward border expansion, improvements are already in process to increase the accessibility of the 50,000 vehicles and 25,000 pedestrians that enter the United States daily through the San Ysidro Land Port of Entry. The Shamrock Group, for instance, is in prime position to capitalize on these trends with their Plaza at the Border development, a 98,000-square-foot retail center positioned adjacent to the Las Americas Premium Outlets,” according to Mansour.
As to the question, “What kinds of retailers are performing best in San Diego?” Mansour had this comment: “While service stations have seen the largest year-over-year change, an increase of more than 17 percent in transaction volume, drugstores and banks continue to lead investor demand. Convenience store 7-Eleven has been aggressively expanding throughout the market, and has recently opened more than 600 new locations nationwide.”
“The county has also seen an increasing number of discount retailers. There are 18 new Dollar Tree stores, 17 new 99 Cents Only stores and numerous new mom-and-pops. These retailers' smaller, more convenient locations allow them to compete directly with larger powerhouses like Target and Wal-Mart. Trends are showing that middle-class shoppers are opting for deep discounting in lieu of department stores,” said Mansour. Ross Stores is cashing in on this craze by introducing their dd's Discount concept into the San Diego market. The company plans to open 20 additional locations nationwide this year, many of which will take place in mature shopping centers. This is in addition to the more than 80 dd's Discount locations that are currently in operation.”
To learn more Mansour can be reached at 858. 373.3184 and Zivkovic is at 858.373.3124
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[mepr-show rules="58038"]Sale date: 10/17/2014. Sale price: $5,661,000 all cash, 1031 exchange for buyer. APN 137-34-143. Property sold at approximate 6% cap rate. Property had seven year remaining on the lease.[/mepr-show]