One of the six retail pads at Perris Marketplace in Perris, California, that sold in a break-up strategy.

Six Retail Pads in Perris Fly for $30M

Carrie Rossenfeld Retail

Owners and developers Evergreen and Trachman Indevco have sold six retail pads in separate transactions at Perris Marketplace, a 225,000-square-foot Walmart Supercenter–anchored shopping center in Perris, California, for a total of approximately $29.5 million to six separate buyers. Four of the six buyers satisfied 1031-exchange requirements.

Perris Marketplace is located at 1820-2000 North Perris Boulevard, less than one quarter mile from the I-215 freeway. The center was originally planned to include two multi-tenant shop buildings, but due to the high demand, a third approximately 12,500-square-foot shop building was added to accommodate tenant interest. The line-up of retailers features a variety of food and service tenants including America’s Best Contacts and Eyeglasses, Chipotle, Dickey’s BBQ, Great Clips, Jamba Juice, Jimmy John’s, Pacific Dental, Panda Express, Pieology, Popeye’s, Sally Beauty, Starbucks, T-Mobile, Verizon Wireless, Waba Grill, Wendy’s, and Yogurtland.

Hanley Investment Group Real Estate Advisors (HIG) EVP Bill Asher and senior associate Jeff Lefko represented the seller in the transactions. Evergreen is a 42-year-old national retail and multifamily development company with heavy emphasis on developing projects in California, Colorado, Arizona, and Utah. Trachman Indevco is a real estate investment and development company that specializes in new ground-up retail development and retail development/repositioning opportunities in Southern and Central California.

The 100 percent-occupied properties total approximately 39,000 square feet and consist of three multi-tenant pad buildings and three single-tenant fast-food pad restaurants. Most of the buyers purchased each asset because of the reliable stable income stream created by internet-resistant, service-based, national and regional credit tenants on new long-term leases, according to Asher.

“Investors and the eventual buyers were very attracted to the overall strength of the location and the history of Walmart being established in the area since 1992,” Asher says. “The original Walmart in Perris was the first to open in all of Riverside County. The relocation to the subject site to build a new Supercenter format store in 2015 showed Walmart’s long-term commitment to the region and was a key driver to investors’ interest in each pad within the project.”

He says that HIG was able to maximize value for the owner through individual sales to private non-institutional investors in a price range ($2 million to $10 million) that in today’s market appeals to “arguably the largest buyer pool in the retail investment industry.” He adds that in addition to executing a break-up sale strategy, with interest rates rising and the overall retail market continuing to transition in regard to pricing, “we implemented a pre-sale marketing process on multiple buildings prior to completion of construction to help the seller retain maximum value for the development. For multiple transactions, we were able to procure buyers for each asset prior to each building being completed, and structure closings after tenants had finished their build-outs and opened for business.”

Asher calls Perris Marketplace one of the best-positioned and highest-profile new regional retail sites in Riverside County. “The combination of the quality of location, draw of Walmart, and brand-new construction were all factors that generated a significant amount of interest in each retail pad.”

He predicts that newly built single-tenant NNN retail investments and multi-tenant retail leased to food and service-based credit tenants will continue to be highly sought-after in today’s market. “We continue to experience steady demand and values have yet to significantly see decline of this size and type over the past four years. Properties priced $10 million or less will remain the most active.”