A private developer based in Irvine, California, has sold a brand-new, 37,000-square-foot, single-tenant net-lease property occupied by LA Fitness at 29920 Temecula Parkway in Temecula, California, to a family trust from Los Angeles for $13 million, according to a release from a representative of Hanley Investment Group Real Estate Advisors (HIG). The release says the sale price represents a cap rate of 6.13 percent.
According to the release, the property is positioned at the major intersection of Temecula Parkway (CA-79) and I-15, the first major thoroughfare for traffic entering the Temecula Valley. Completed earlier this year, building is situated on 3.69 acres.
The statement says HIG senior associate Austin Blodgett and EVP Eric Wohl represented the seller in the transaction, while the buyer was represented by Richard Lee of R&L Properties–Cerritos Inc. of Corona, California.
According to Blodgett, this property benefits from the large monument signage, direct frontage on Temecula Parkway (68,000 cars per day), and its freeway-visible location near the I-15 on/off ramp (176,000 cars per day). The source reports that the property is an anchor to the Gateway to Temecula, a brand-new lifestyle center that contains approximately 61,000 square feet of commercial space including Starbucks with a 24-hour drive-thru, Chevron and Car Wash, Verizon Wireless, The Pizza Press, and 4,000 square feet of office.
Blodgett also says in the release that LA Fitness just executed a brand-new 15-year primary lease term at the property with a number of renewal options. “This is a rare sale of a single-tenant LA Fitness in Southern California,” Blodgett is quoted as saying. “This location has low rent for a new-construction LA Fitness, which is what ultimately got the buyer comfortable paying this cap rate.”
The statement says HIG has sold two of the four single-tenant LA Fitness properties that sold in California over the last 18 months.
According to Wohl, the Inland Empire market is the second fastest-growing region in California. He says the population has grown over 81 percent since 2000, making it one of the fastest-growing submarkets in California, and Temecula itself has several development projects going, including the $300 million expansion of Pechanga Resort and Casino, a new 1,750-unit master planned community called Altair, and over $24 million in road improvements to the I-15 Interchange to handle the increase in traffic to the region.