A grocery-anchored neighborhood retail property in Escondido, California, is up for sale. NKF Capital Markets is exclusively marketing for sale Escondido Valley Center, a 92,169-square-foot property that was completely remodeled in 2017.
The center is 100 percent occupied by national retail brands including Aldi (grocery anchor), HomeGoods and BevMo! It is being marketed on a best-offer basis with all offers due April 4.
The property is situated within the West Escondido submarket, which not only serves as the dominant retail corridor, but also has distinguished itself as the premier business district in northeast San Diego. The submarket includes 18 car dealerships, the recently constructed 740,000-square-foot Palomar Medical Center, and Stone Brewery, the largest brewery in Southern California.
Located on just over 7 acres of land at the premier retail intersection of 9th Avenue and West Valley Parkway, the center was repositioned in 2017, adding Aldi and HomeGoods under brand-new long-term leases. These additions helped transition the center from its former community-center status to what NKF terms a “best-in-class grocery-anchored asset.”
NKF Capital Markets vice chairman Pete Bethea and senior managing directors Rob Ippolito and Glenn Rudy are marketing the center on behalf of the ownership. According to Bethea, “Escondido Valley Center represents an excellent long-term grocery-anchored investment in a proven North San Diego county submarket.”
Rudy adds that the center’s infill location “in the heart of the area’s primary retail corridor, upgraded tenancy, and recent capital investment will attract investors seeking a core grocery-anchored acquisition in one of Southern California’s most coveted areas.”
NKF reports that San Diego County continues to perform as one of the top retail markets in the entire nation. With very few quality assets available, the opportunity to acquire Escondido Valley Center provides an investor with a stable asset in the highly sought-after North County region. In addition, grocery-anchored retail continues to outperform all other retail products, and Aldi Supermarket delivers a “much needed value proposition for area consumers.”
Staples and BevMo! have occupied the center since 2000 and 2008, respectively, while new additions Aldi Supermarkets and HomeGoods have committed to new 10-year leases. With new additions Aldi and HomeGoods, Escondido Valley Center is the recipient of over $2.5 million of capital improvements including parking, new roofs, HVACs, and new facades, thereby limiting near-term capital expenditures.
NKF also points out that West Escondido is home to a list of industry-leading retailers including Target, Home Depot, T.J. Maxx, Dick’s Sporting Goods, Albertsons, Ross Dress for Less, Petco, In-N-Out Burger, and more. Overall occupancy for the submarket stands at 98 percent, and the asset will be delivered free and clear of existing debt.
The center is also desirable because no developable parcels in the immediate or surrounding trade area will result in continued demand for existing centers. The customer base is dense and affluent, with an estimated population of 150,177 and average annual household incomes of $73,401 in three miles.
Escondido Valley Center’s daytime population within two miles of the center is more than 50,000 people. With 61,000 cars passing Escondido Valley Center along West Valley Parkway and Auto Parkway, traffic counts at the center are the highest in the city, according to NKF.
by Carrie Rossenfeld