IRVINE, Calif., Jan. 17, 2013 (GLOBE NEWSWIRE) -- Hanley Investment Group Real Estate Advisors, one of the most dominant retail investment groups in the United States and a market leader in the sale of retail properties, announced today the company closed out the fourth quarter of 2012 with the sale of 23 retail properties totaling over $90 million. The retail transactions span grocery/drug anchored shopping centers, multi-tenant and single-tenant retail properties. Hanley Investment Group achieved many milestones during the fourth quarter including a record sales price of $1,064 per square foot (psf), the highest sale price per square foot for a multi-tenant strip center in Los Angeles County in 2012.
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-foot landmark Vons Pavilions-anchored center on Balboa Peninsula in Newport Beach was of institutional quality and the $34.89 million sales price represented $790 psf on a fee simple basis. According to Edward B. Hanley, president of Hanley Investment Group, one of the brokers who negotiated this transaction, "This was the highest sale price psf in the last 5 years for the purchase of a grocery-anchored center in California and was challenging due to the fact that the sale was structured using REIT stock." Eric P. Wohl of Hanley Investment Group assisted with the sale of stock in the company that owned The Landing shopping center.
Additionally, Hanley represented the buyer and seller in the $22.85 million sale of The Marketplace in Palm Desert, a 96,463-square-foot Stater Bros/Walgreens-anchored center. This was one of a very few grocery-anchored centers to trade in the area. The third sale, a 91,631-square-foot Vons-anchored center, Seabridge Marketplace in Oxnard was an off-market transaction brought about by the need to extract the ownership from a very difficult lender. "From start to finish, we closed in 7 days," said Hanley. Hanley represented the buyer and seller in this transaction as well.
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-foot Kohl's in Port Orange, Florida) to the sale of a 132,547-square-foot shopping center anchored by Office Depot and Big Lots in Rock Hill, South Carolina. Other sales included a 31,140-square-foot CVS/pharmacy-anchored shopping center on 2.54 acres in Huntington Beach, Calif., and a 76,947-square-foot Kroger-anchored shopping center in Charleston, West Virginia.
"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-backed single-tenant properties such as McDonald's, CVS, Walgreens, Chase and Wells Fargo.
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," reports Wohl. "Buyers are paying a large premium for well-located single-tenant assets with corporately-backed leases in strong locations. We have also seen a rapid increase in sale-leaseback activity as corporations and franchisees are able to get top dollar for their real estate holdings and realize 100% of the current market value so they can redeploy those funds into their core business."
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-anchored shopping centers and single-tenant properties in Florida, South Carolina, West Virginia, New Hampshire, Nebraska, Alabama, Texas, Arizona and Nevada."
"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!"
About Hanley Investment Group Real Estate Advisors
Built on a solid foundation of performance, integrity and dedication, Hanley Investment Group Real Estate Advisors is a boutique retail investment advisory firm with a three billion dollar transaction track record that is comprised of innovative specialists delivering unparalleled service and superior results that consistently exceed client expectations. Hanley Investment Group's expertise, commitment and unwavering focus of putting the client's needs first have continued to set the company apart in the industry. Hanley Investment Group works closely with individual investors, developers, and institutional property owners in every facet of the transaction to insure that the highest value is achieved. Clients rely on Hanley Investment Group to be the most knowledgeable and trusted source for valuation services, market information and retail property acquisitions and dispositions. For more information, visit the Company's website at www.hanleyinvestment.com or call (949) 585-7610.
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