The recent sale of a new multi-tenant retail property in Baldwin Park fetched the highest price in the eastern San Gabriel Valley in recent years, according to the sellers’ brokerage firm and comparable area sales.
The property is fully leased to Chipotle Mexican Grill Inc., Coffee Bean & Tea Leaf, WaBa Grill Franchise Corp. and Jersey Mike’s Subs.
Hanley Investment Group Real Estate Advisors, a Corona del Mar-based real estate brokerage and advisory firm, has sold the newly constructed space with nearly 6,800 square feet of retail at 13916 Garvey Ave. in Baldwin Park for a $8.3 million, or $1,225 per square foot. The cap rate was 4.3 percent.
The premium nature of the price is apparent compared a 5,600-square-foot retail property at 8623 Garvey Ave. in nearby Rosemead, which sold for $4 million, or about $711 per square foot, in February three months ago.
Bill Asher, executive vice president of Hanley Investment Group, along with Lee Csenar, a vice president, represented the seller, described as a private investor in Orange County.
Csenar said the seller “achieved record pricing due to the Internet-resistant, food-based tenancy” that has better withstood e-commerce’s impact on retail.
Dennis Earls of Secured Properties Inc. of Koreatown represented the buyer, a private investor in Los Angeles, according to a statement from Hanley Investment Group.
The property is located adjacent to the 10 freeway on 1.3 acres of land near the intersection of Garvey Avenue and Vineland Avenue.
“We generated multiple qualified offers and selected an experienced 1031 exchange buyer in Southern California who had owned other similar assets in his portfolio in the past,” Asher said in a statement. “We secured premium pricing that was 30 to 60 basis points better regarding cap rate than most of the other offers.”
L.A. is Shrinking
The average square footage allocation per employee in Los Angeles County has declined by 9.6 percent since 2009 to 160 square feet – more than 30 square feet per person below the national average, according to a study by Cushman & Wakefield.
Employers nationwide have reduced the average square footage per employee by 8.3 percent since the end of the Great Recession, the study said.
“We expect that more densification to occur, but at a lower rate as companies supplement most private space reductions with increases in communal space,” Cushman & Wakefield researchers noted in the study, named Space Matters.
The study also found that overall office rent concessions – incentives to encourage leasing, such as free rent for a time period – tumbled 10.7 percent in 2017. Tenant improvement allowances slipped by more than $4 per square foot. Los Angeles County joined Miami and northern Virginia as the only office markets in the U.S. to see declines in rent concessions for office space.
Concessions offered in downtown Los Angeles increased, however, the study said.
Downtown’s tight parking allocations of 1.3 spots provided per 1,000 square feet leased is less than half of the national average of 2.9 spots.
Munger Firm’s New Hire
Munger Tolles & Olson law firm has hired lawyer George Clayton Fatheree III to join its real estate group as a partner at its downtown Los Angeles office.
Fatheree previously was employed for 10 years at Skadden Arps Slate Meagher & Flom as a lawyer in its real estate group.
Fatheree will focus and his practice on commercial real estate clients at Munger, including private equity funds, developers, lenders and individuals involved in large or complex real estate transactions, the firm said.
The firm’s real estate clients have included Tishman Speyer Properties, Caruso, CBRE Global Investors, Oaktree Capital Management and others.
Staff reporter Ciaran McEvoy can be reached at [email protected] or (323) 556-8337.
