A 58,652-square-foot retail property in Palmdale occupied by Smart & Final and Barnes & Noble recently sold for $13.5 million. The sale was part of a larger six-property, $32 million break-up strategy of the seller.

The seller, a family office that operates retail centers around the country, was represented by SRS’ Senior Managing Principals Matthew Mousavi and Patrick Luther. The buyer was a private investor based in Southern California.

At the time of the sale, both tenants had 10 years left on their triple net leases. A triple net lease allows a landlord to be more hands off and still collect rent, while the tenant is responsible for most aspects of the property.

Breaking up the center

The asset was built in 1999 and is part of the Palmdale Marketplace, a large center with tenants that include Target Corp., Lowe’s Cos. and Sprouts. “This final sale involved the two-tenant portion of the property that included Barnes & Noble and Smart & Final. Due to the offering being grocery anchored under newly extended leases, we received multiple offers from private and institutional profiles, ultimately selecting a local high net worth investor,” Luther said in a statement.

Previously sold properties within the Palmdale Marketplace include Shops at Marketplace, Vitamin Shoppe, Five Guys, Café Rio, along with other shops. Mousavi said the decision to break up the center rather than sell it as one asset had some benefits.

“This asset is the final sale in a six-property, $32 million break-up strategy within Palmdale Marketplace that we have executed on behalf of the ownership over the past three years,” Mousavi said in a statement. “We have successfully created significant additional value for our client by breaking up the asset and selling to private investors at more favorable price points than if we were to transact with a single buyer, ultimately maximizing returns for the seller.”