A strip mall along Washington Boulevard just south of Downtown Los Angeles has traded hands for $44.8 million.
Carthay-based Reliable Properties bought the Washington Plaza retail center at 408 – 530 E. Washington Blvd. near Downtown from Eagles Nest Property of Huntington Beach, the Los Angeles Business Journal reported.
The price of the 137,000 square-foot center, which is 98 percent leased, came to about $327 per square foot. The current lineup of tenants includes anchors 99 Cents Only and Rite Aid. Other tenants include Davita Dialysis, Ace Cash Express, Dunkin’ Donuts, Baskin Robbins, Waba Grill, El Pollo Loco, T-Mobile, Panda Express and Boost Mobile.
Marcus & Millichap’s Orbel Ovaness and Ara Rostamian represented the buyer and seller in the deal.
“This property traded for the second time in history,” Ovaness said. “It was owned by a family office … since the early ‘80s and it encompasses an entire city block.”
The center has done well despite the pandemic, he said, with nearly full occupancy. He said the buyer, Reliable Properties, considers Washington Plaza “a trophy, generational investment.”
A 1,000-unit apartment mega complex with a retail componant could easily be built on the site, located on 5.6 acres near public transit. Meanwhile, there’s an opportunity to increase rents in the next 15 or 20 years.
“It has so many different avenues of creating value,” Ovaness said. “You have the value-add component through the existing shopping center and their leases and you have an incredible redevelopment opportunity here.”
The seller, Eagles Nest Property, is looking at investing in less management-intensive single-tenant, net-leased assets throughout the country that would allow the seller to “retire with a steady flow of income coming in,” Ovaness said
“Single-tenant assets across the board are some of the hottest-ticket items in the retail sector,” he said, especially when leased on an absolute triple net basis with a long-term lease in place. “It simplifies life and secures their equity … with zero management involvement.”
In a triple net lease, the tenant is responsible for everything from maintenance to property taxes. Ovaness said he was in discussions with other investors looking at moving into low-management, heavy triple net leased properties as well.
[Los Angeles Business Journal] – Dana Bartholomew