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| LA Fitness, 1382 South Cotton Lane, Goodyear, AZ |
IRVINE, CA, Nov. 10,
2014 – Faris Lee Investments, a leading retail advisory and investment sales
firm, has completed the $12 million sale of a 45,000-square-foot, single
tenant, NNN-leased retail property occupied by LA Fitness in Goodyear, Ariz.,
a growing suburb of Phoenix.
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| Matthew Mousavi |
Chris Tramontano, Patrick Luther and Matthew
Mousavi of Faris Lee Investments represented the seller, DTD – Devco 9,
LLC, out of Scottsdale AZ. The buyer, a private family trust from Los Angeles,
was represented by Republic Commercial Real Estate.
The buyer was in a 1031 exchange up-leg with a property out
of California and placed a small loan on the asset to cover debt as part of its
1031 exchange. The closing cap rate was 6.8 percent.
LA Fitness is on a long-term 15-year lease with
approximately 11 years remaining on its initial term.
Built in 2009, the property is located at 1382 South Cotton
Lane at the signalized hard corner intersection of South Cotton Lane and West
Yuma Road and near Interstate 10. The asset offers unobstructed street
visibility with monument signage.
“Faris Lee highlighted the strong credit tenant with a
corporate lease guarantee, and marketed primarily to private, out-of-state
buyers with a particular focus on California investors,” said Mousavi.
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| Patrick Luther |
“Our marketing
campaign generated more than 10 offers, from institutional and private
investors. In this situation the private market was more aggressive than the
institutional buyer pool by over 50 basis points.”
Tramontano added, “Faris Lee highlighted the high growth
trade area that the property is located within, and overcame the objections of
vacant outparcels and undeveloped land surrounding the property by focusing on
tenancy and the future growth potential of the rest of the center and trade
area.”
The LA Fitness property is located in a thriving area retail
corridor. It is near Canyon Trails Town Center, a 435,000-square-foot power
center with tenants Target, World Market, PetSmart, Fry’s, Dollar Tree, and
Famous Footwear. It is the only fitness center within a three-mile radius which
has a population of more than 34,000 residents.
This Phoenix-area sale marks the third transaction Faris Lee
has completed over the past three months to California-based buyers totaling
nearly $48 million. These sales provide testimony to the trend that California
capital is seeking opportunities in growing markets in nearby states such as
Arizona.
The firm announced the $22 million sale of Watson
Marketplace, a fully leased, 90,000-square-foot retail center located in
Buckeye, Ariz., to a San Diego buyer in September. Last month, Faris Lee
completed the $13.7 million sale of a multi-tenant retail property fully
occupied by LA Fitness, OfficeMax, Carter’s, and Styles for Less in
Peoria.
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| Chris Tramontano |
“The California market continues to be highly competitive.
Cap rates are already compressed to historical lows, and there are many who
believe they have room to compress further,” said
Richard Chichester,
president and CEO of Faris Lee Investments.
“Consequently, California investors seeking yield are
increasingly attracted to out-of-state markets. Arizona is an area of
particular interest for California investors because of its proximity and
improving economy. In the past year we’ve placed better than 55 percent of our
California capital in out-of-state investments.”
For a complete copy
of the company’s news release, please contact:
Darcie Giacchetto
Spaulding Thompson & Associates
949.278.6224
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