An investor based in Germany has bought into the thriving grocery segment of the retail sector in the U.S. with a $54 million acquisition of the site of a Whole Foods Market in Santa Monica.
Deka Immobilien paid $54.3 million to Santa Monica-based Tooley Interests for the 29,064-square-foot building, home to the upscale market at 2121 Cloverfield Blvd., according to the Commercial Observer.
The deal was the second West Coast investment for the global real estate investment arm of Deka Group, a bank based in Frankfurt, Germany, which paid $196 million at the end of 2020 for a 22-story office tower in Downtown Los Angeles.
It also made the list of most expensive retail deals in Los Angeles in terms of price per square foot – which came out to $1,022 per square foot for the entire 53,000 square foot property.
Grocery stores have become a popular asset class during the pandemic, compared with other retailers, largely because grocers were exempt from pandemic-related closures and restrictions. They’ve also served as hubs for their delivery services.
“Since grocery stores are experiencing record sales, we were drawn to this stand-alone, single-tenant Whole Foods Market, as it is the perfect investment for a long-term investor,” said Driss Oualkadi, president of Deka Immobilien in the U.S.
Tooley acquired its Santa Monica property just off Pico Boulevard in 2013, fixed up the building, then secured a long-term lease with Whole Foods. It was represented during the sale by JLL’s Gleb Lvovich, Geoff Tranchina, Bryan Ley and Dan Tyne.
“The sale of Whole Foods Santa Monica demonstrates continued demand for net-leased real estate in strong locations with credit and a durable business,” Lvovich said.
As a safe haven for investors during the pandemic, grocery stores have seen recent deals across Southern California.
In September, a 30,000-square-foot building leased to Amazon Fresh on L.A.’s Westside sold for $35 million – around $1,166 a foot.
In November, a 47,570-square-foot building occupied by Vons on the edge of Downtown Long Beach was listed at $43.3 million, or $903 per square foot.
Meanwhile, LoanCore Capital provided $63.78 million in refinancing for the 14.5-acre Midtown Shopping Center anchored by a major regional grocery store. And high-end Gelson’s signed a long-term lease at the West Edge mixed-use development.
[CO] — Dana Bartholomew