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4000 Union Pacific Ave, Commerce, CA
ArizonaCaliforniaCompany NewsNevadaRetailTexasTop StoriesWestern

Deep-Discount Retailer 99 Cents Only to Close All 371 Store Locations

by Jeff Shaw

COMMERCE, CALIF. — 99 Cents Only Stores LLC has announced plans to close all 371 of its stores and wind down business operations. The company has entered into an agreement with Hilco Global to liquidate all merchandise and dispose of fixtures, furnishings and equipment at the stores. Sales under this agreement are expected to begin today. 99 Cents Only was founded in 1982 as a deep-discount retailer where every item cost less than a dollar. The company is headquartered in the southeast Los Angeles suburb of Commerce, and currently operates stores in California, Texas, Arizona and Nevada. The company consulted its financial and legal advisors to find a way to continue operating, but ultimately decided the wind-down was necessary and the best way to maximize the value of its assets. Hilco Real Estate will manage the sale of the company’s owned and leased real estate assets. The company has appointed Chris Wells, managing director at Alvarez & Marsal, as chief restructuring officer. Additionally, Mike Simoncic, interim CEO of 99 Cents Only and managing director at Alvarez & Marsal, will step down. “This was an extremely difficult decision and is not the outcome we expected or hoped to achieve,” said Simoncic. “Unfortunately, the …

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CaliforniaMarket ReportsMultifamilyWesternWestern Market Reports

Softened Rents, Tenant Dynamics Define Orange County’s Multifamily Market

by Jeff Shaw

— By Pat Swanson, executive vice president, Colliers International — As Orange County enters 2024, its multifamily market stands at the brink of transformation, confronting challenges like softened rents, affordability dynamics and the resilience required in the face of tenant-related complexities. In the midst of a robust economy, the region grapples with obstacles and opportunities that will significantly shape the future of its real estate sector. Orange County’s economic vitality is evident, with a 5.2 percent growth in U.S. GDP and a thriving job market. However, the looming shadow of interest rate fluctuations and inflation above 3 percent has briefly slowed down real estate transactions. While rates are predicted to stabilize, the potential for modest reductions later in the year signals a period of nuanced economic growth and sustained higher rates. In 2024, Orange County’s multifamily housing market is set for change, departing from previous trends of rent increases. The region anticipates modest growth that will be influenced by factors like slower job growth, an influx of 510,000 new units and the mounting challenge of finding qualified tenants. Affordability takes center stage, with rent-to-income ratios reaching 29.8 percent. The widening affordability gap between owning a home and renting is further …

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349-S-La-Fayette-Pl-Los-Angeles-CA
AcquisitionsAffordable HousingCaliforniaMultifamilyWestern

Colliers Brokers $43.4M Sale of Affordable Multifamily Property in Los Angeles

by Amy Works

LOS ANGELES — Colliers has arranged the sale of an affordable apartment community located at 349 S. La Fayette Place in the La Fayette Park neighborhood of Los Angeles. The asset traded for $43.4 million, or $362,000 per unit. Kitty Wallace and Kalli Knight of Colliers represented the buyer and seller in the transaction. Situated on a 43,000-square-foot lot, the three-story property features 120 affordable apartments. The buyer paid cash to preserve the right to create and maintain affordable housing, and purchased the property with the intent of promoting and advancing workforce and affordable housing initiatives. Built in 1971 and extensively remodeled in 2017, the property features 120 subterranean parking spots with third-party billing for electric vehicle charging stations. Currently, 85 percent of the units are fully renovated. The units feature stainless steel appliances, in-suite washers/dryers, hardwood floors with carpeting in the bedrooms and mini-split air conditioners and heaters. Community amenities include a new roof, updated plumbing and boiler, a resurfaced and modernized pool, built-in barbecue area, redesigned fitness center, electric vehicle charging stations and elevator modernizations. All units also include 100-amp electrical panels and new plumbing to accommodate the installation of in-unit washers and dryers.

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7400-Hazard-Ave-Westminster-CA
AcquisitionsCaliforniaIndustrialWestern

Ares Management Buys 258,506 SF Distribution Facility in Westminster, California

by Amy Works

WESTMINSTER, CALIF. — A real estate fund managed by Ares Management has acquired a freestanding industrial distribution building in the Orange County city of Westminster from an undisclosed seller. Terms of the transaction were not released. Situated on 11.8 acres at 7400 Hazard Ave., the 258,506-square-foot building features 22- to 24-foot clear heights, ample dock-high and grade-level loading, abundant auto parking and 40 off-dock trailer parking stalls. At the time of sale, the property was 72.6 percent leased. Jeff Chiate, Jeffrey Cole, Rick Ellison and Matt Leupold of Cushman & Wakefield’s National Industrial Advisory Group – West represented the seller in the deal. Randy Ellison and Kyle McGillen of Cushman & Wakefield provided leasing advisory and were retained by the buyer to continue leading project leasing for the asset. Additionally, Rob Rubano, Brian Share, Max Schafer and Becca Tse of Cushman & Wakefield Equity, Debt & Structured Finance secured acquisition financing for the buyer.

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AcquisitionsCaliforniaMultifamilySeniors HousingWestern

CareTrust REIT Acquires Three Seniors Housing Communities in Southern California for $60M

by Jeff Shaw

SAN CLEMENTE, Calif. — CareTrust REIT Inc. (NYSE:CTRE), a San Clemente-based seniors housing investor, has acquired three continuing care retirement communities (CCRCs) located in Los Angeles, Orange, and San Diego counties.  The portfolio totals 475 assisted living, skilled nursing and memory care beds/units. Bayshire Senior Communities, an existing CareTrust tenant based in Southern California, has taken over management of all three properties. The highest profile property of the three is Torrey Pines Senior Living in San Diego. CareTrust paid $32.3 million for the asset, including transaction costs. Annual cash rent for the first year is approximately $2.6 million, increasing to approximately $3 million in the second year with CPI-based annual escalators thereafter. CareTrust completed the acquisition of the other two CCRCs through a joint-venture arrangement with a third-party regional healthcare investor. Pursuant to the arrangement, CareTrust is the managing member of the joint-venture entity. CareTrust provided a combined common equity and preferred equity investment amount totaling approximately $28 million. The joint-venture landlord has leased these facilities to Bayshire pursuant to a new, triple-net master lease agreement with an initial term of 15 years with two five-year extension options. CareTrust’s initial contractual yield on its combined preferred and common equity investments …

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CaliforniaLoansOfficeRetailWestern

JLL Arranges $65M in Financing for Wateridge Office, Retail Campus in West Los Angeles

by Amy Works

LOS ANGELES — JLL Capital Markets has arranged $65 million in financing for Wateridge, a six-building office and retail campus in West Los Angeles. LPC Realty Advisors I LLC, an investment advisory affiliate of Lincoln Property Co., is the borrower. Todd Sugimoto, Mark Wintner and Chad Morgan of JLL Capital Markets secured the five-year, fixed-rate financing with Deutsche Bank. Built between 1989 and 2005 on 21 acres, Wateridge features three multi-tenant office buildings, a single-tenant medical office building, a standalone 24-hour fitness facility and a multi-tenant retail strip center. At the time of financing, the 583,580-square-foot campus was 80 percent occupied and leased by credit tenants, including Kaiser Health Foundation, County of Los Angeles and Providence Health.

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13000-13160-Palm-Dr-Desert-Hot-Springs-CA
AcquisitionsCaliforniaRetailWestern

Progressive Real Estate Partners Negotiates $6.1M Sale of Value-Add Retail Property in Desert Hot Springs, California

by Amy Works

DESERT HOT SPRINGS, CALIF. — Progressive Real Estate Partners has brokered the sale of a retail property, located at 13000-13160 Palm Drive in Desert Hot Springs, located in the Coachella Valley. An Orange County-based private investor sold the property to a Los Angeles County-based private investor for $6.1 million in an all-cash transaction. Totaling 33,004 square feet, the property features a multi-tenant building and two pad buildings, one of which is occupied by Chase Bank. Greg Bedell of Progressive Real Estate Partners represented the seller, while Heather Sharp of Progressive Real Estate Partners procured the buyer in the transaction.

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AcquisitionsCaliforniaIndustrialTop StoriesWestern

JLL Arranges $197M Sale of Commerce Way Distribution Center in Fontana, California

by Kristin Harlow

FONTANA, CALIF. — JLL Capital Markets has arranged the $197 million sale of Commerce Way Distribution Center in Fontana, which is located about 50 miles east of Los Angeles in the Inland Empire. EQT Exeter was the buyer. Built in 2000, Commerce Way Distribution Center totals 819,004 square feet. Located on Santa Ana Avenue, the property features a cross-dock configuration and a clear height of 30 feet. JLL says the facility benefits from its location in the Inland Empire, the largest industrial market nationwide with immediate access to critical supply chain infrastructure and Southern California’s population of more than 25 million people. As of the fourth quarter of 2023, the vacancy rate for the Inland Empire industrial market was 5.9 percent, a 90-basis-point increase quarter-over-quarter due to a high volume of new industrial space delivered by developers, according to JLL. The market experienced positive net absorption despite the 10.5 million square feet of new space delivered in the quarter. Patrick Nally, Mark Detmer, Evan Moran and Makenna Peter of JLL represented the seller, Manulife Investment Management on behalf of clients, and procured the buyer. JLL’s debt advisory team on the deal included Kevin Mackenzie, Brian Torp and Samuel Godfrey. Mike …

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CaliforniaMarket ReportsRetailWesternWestern Market Reports

Orange County Retail — Is the Juice Worth the Squeeze?

by Jeff Shaw

— By John R. Read, senior vice president, CBRE Retail Investment Properties-West — Undoubtedly, 2023 proved to be a volatile year. It was marked by persistent inflationary pressures, four 25-basis-point interest rate hikes by the Fed and a surge in the 10-year U.S. Treasury yield (from the high 3 percent range in January to peak levels near 5 percent in October). These changes had a pronounced impact on retail real estate investors, businesses occupying retail centers and consumers who frequented these establishments.  The real estate sector particularly grappled with the cost of financing in an environment of higher interest rates. While these challenges did temper Orange County’s retail market to some extent, it largely remained resilient due to its strong underlying fundamentals. These include a substantial population of high-income earners, flourishing industries like tourism and destination-oriented shopping centers, as well as a supply constrained retail property base with limited large-scale retail development. The unemployment rate in Orange County remained steady at 3.8 percent in December 2023, unchanged from November’s revised rate. This rate is notably higher than the year-ago estimate of 2.7 percent. In comparison, California’s unemployment rate stands at 5.1 percent rate, while the national rate during the same …

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8101-Larson-Ave-Garden-Grove-CA
CaliforniaLoansMultifamilyWestern

Marcus & Millichap Arranges $5M Refinancing for Larson Apartments in Garden Grove, California

by Amy Works

GARDEN GROVE, CALIF. — Marcus & Millichap has arranged $5 million in refinancing for Larson Apartments at 8101 Larson Ave. in the Orange County city of Garden Grove. Constructed in 1980, the two-story building features 21 apartments in a mix of studio, one-, two- and three-bedroom layouts. Ron Balys of Marcus & Millichap Capital Corp. secured the bank financing on behalf of the private client. Terms of the 30-year loan include 65 percent loan-to-value ratio and a 6.3 percent interest rate with a 30-year amortization schedule.

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