Hanley Investment Group Real Estate Advisors has completed the sale of Sierra Del Oro Towne Centre, a 110,004-s.f. Ralphs-anchored shopping center in Corona, California, to Phillips Edison & Co. of Cincinnati, Ohio. The price was $28.6 million, Hanley reported.
The center is located at the intersection of Green River Road and Serfas Club Drive.
According to CoStar, a provider of commercial real estate intelligence, this is the second grocery-anchored property to trade in the Inland Empire in the last 24 months.
Hanley Investment Group EVP Pat Kent, along with President Ed Hanley and Senior Associate Corey Olson, represented the seller, Cornerstone Development Partners of Irvine, California. Phillips Edison represented itself.
“The sale of Sierra Del Oro represented a unique opportunity to acquire an entire grocery-anchored shopping center, including the anchors, shop tenants and pad building ground leases in an affluent market located in Southern California,” said Kent. “Ralphs has operated at the shopping center since it was originally constructed in 1991 (26-plus years) and executed a five-year extension in 2015.”
According to Kent, the Sierra Del Oro Ralphs is the only “traditional” grocery store within a three-mile radius serving the westerly part of the Corona market, and “Ralphs has a captured customer audience of nearly double that of its competitors.”
Kent added that the average household income within a one-mile radius of the property is in excess of $104,000, and there are more than 156,000 people within a five-mile radius. The property is less than one mile from the Serfas Club Drive exit and two miles from the Green River Road exit on the 91 Freeway, with 275,000 cars per day passing by.
Sierra Del Oro Towne Centre is located on 11 acres at 2621-2721 Green River Road. Tenants include Ralphs, Dollar Tree, Anytime Fitness, Bank of America, Jack in the Box, Domino’s Pizza, Children’s Montessori Center, Kumon Math and Reading Center, Mercury Insurance and Postal Annex. The shopping center was 94 percent occupied with strong historical tenants and anchors. According to Hanley Investment Group, 88 percent of the current tenancy has occupied space at the property for more than five years and 70 percent of the current tenancy has occupied space for over 10 years.
Demand for grocery-anchored centers is strong
“Since 2014, there have been 25 retail properties that have traded for over $20 million in Riverside and San Bernardino counties, according to CoStar; only six of these properties were grocery-anchored, which speaks to the rarity of this type of property,” said Kent. “In that same period of time, there have been 195 retail properties that have traded for over $20 million in Los Angeles, Orange and San Diego counties, including five grocery-anchored retail properties that changed hands in this year alone.”
Ed Hanley added, “The market for grocery-anchored centers in infill markets remains strong, with interest from both the institutional buyers and private 1031 exchange buyers. So far this year, we have seen an increase in the supply as sellers recognize that this is an ideal time to sell. However, there still remains limited properties available similar to the Sierra Del Oro in both size and quality.
“Buyers are willing to look in both primary and secondary markets outside of California in search of higher returns and more inventory,” he added.