DTLA Ralphs-Anchored Retail Trades for $21 Million

Retail real estate investor Mushmel Properties paid $20.9 million for a Ralphs-anchored retail property in the South Park neighborhood of downtown Los Angeles.

The family-owned investment firm is based in Sherman Oaks and will add the Ralphs property to its portfolio of Southern California neighborhood centers, strip malls and single-tenant parcels.

The purchased property totals nearly 55,000 square feet of ground-floor retail at 645 West 9th Street, according to a Monday announcement of the deal from brokerages Hanley Investment Group Real Estate Advisors and SRS Real Estate Partners. Ralphs takes up 49,489 square feet, with the remainder of the property occupied by UPS Stores, Supercuts, Simply Salads, Qwench Juice Bar, Honeymee and Momi Sushi.

Mushmel Properties bought the property from Denver-based MDC Realty Advisors.

Hanley Investment Group’s Lee Csenar and SRS Real Estate Partners’ Carlos Lopez represented the buyer and the seller in the trade.

Marketing of the property garnered interest from 1031 exchange investors, family offices and institutional investors, Csenar said in a statement.

The retail is part of a mixed-use project developed by Lee Homes and CIM Group in 2007 that also includes the 267-unit Market Lofts condos and below-ground parking. The lofts were not part of the sale.

MDC bought the Ralphs at Market Lofts in 2013 from CIM Group for about $19 million, according to reports at the time of the deal.

The Ralphs was seen as a boon for South Park and the broader downtown submarket when it opened by offering residents a full-service grocery store.

Lopez said Ralphs has “achieved high sales volumes” and called it the “dominant grocer” for downtown.

Other nearby shopping options for residents include Whole Foods, Target and Smart & Final’s larger-format concept called Extra.

Across the downtown submarket, there was 13.8 million square feet of retail space with 7.5 percent availability in the first quarter, according to a report from CBRE. Availability is up slightly from the prior quarter’s 7 percent. First-quarter net rent for the submarket was $3.02 per square foot, down from $3.25 in the prior quarter, CBRE reported.