Valencia shopping center Gateway Village has sold for $47.5 million, the highest price in total dollars for a Santa Clarita Valley retail property this year. The 153,687-square-foot center was acquired in an off-market transaction by Newport Beach real estate investment firm JH Real Estate Partners Inc. from Stoltz Management Co. of Bala Cynwyd, Penn. “We think the amount of new home construction in the area and the new jobs in the enterprise zone are really going to have a good impact on the retail market,” said Ernie Rivas, director of acquisitions for JH Real Estate. The six-building property, which includes tenants Smart & Final Inc., LA Fitness and Office Depot Inc., was built in 2005 by RKR Inc., a Calabasas developer. The firm sold the property to Grosvenor Investment Management of Philadelphia for $66.4 million in 2007. But the property’s value cratered when the Santa Clarita housing market took a huge hit during the recession. In 2010, Grosvenor sold the property to Stoltz for $35 million, a steep discount from its earlier acquisition price. “When we hit the skids in early 2008, it definitely affected the commercial side of things as well,” said John Cserkuti, senior vice president at NAI Capital Inc.’s Los Angeles North office in Santa Clarita, and the leasing manager of the property. “There were rent concessions and quite a few stores closed.” Cserkuti said the local economy has improved in recent months, allowing asking rents to be raised at the center. “We’ve seen a turn. We’ve adjusted more to a market rate,” he said. Located at the corner of Rye Canyon and Newhall Ranch Road, the property was 92 percent leased at the time of the sale. Cserkuti said there are eight vacancies in smaller shop spaces, ranging from 1,500 to 2,400 square feet. The buyer and seller were both represented in-house. DEXUS Exit The purchase last month of Glendale Commerce Center by Los Angeles real estate investment firm Rexford Industrial LLC marked the delayed exit of Australian company DEXUS Property Group from the U.S. market. Rexford paid $56.2 million for the 473,345-square-foot industrial property of seven buildings at 3332-3424 North San Fernando Road and 3550 Tyburn St. Tenants include Staples Inc. and Anderson Printing. Last year, DEXUS made moves to get out of the U.S. market with a 65-property portfolio sale to New York private equity firm Blackstone Group. And in early April, it sold off most of its remaining U.S. assets to National Pension Service of Korea in a $543 million package deal. But it chose to sell the Glendale property separately, after concerns over groundwater contamination surfaced and the firm publicly said it would damage the rest of the portfolio. However, Howard Schwimmer, co-founder of Rexford, said the property is an ideal investment and the contamination concerns were overwrought. “I’ve had my eye on this project for years and years now,” he said. “It’s probably the best project in this submarket. It looks like an institutional product, which of course means it demands higher rents.” In an area filled with 1950s-era low-slung industrial properties, the buildings in this project are newer and better-equipped for distribution and new manufacturing, Schwimmer noted, adding there is no groundwater-contamination clean up left to be done. “It’s gone through remediation for 20 years,” he said. “We actually got closure on the soil during or just as we went under contract. We’re really pleased with this purchase.” Rexford has made a number of Valley-area acquisitions in recent months. It is currently working on an upgrade to Mission Oaks Corporate Center in Camarillo, which it acquired last year for $59 million. DEXUS and Rexford represented themselves in the deal. Small Success A Studio City office building sold in March for $4 million, despite unusually small units. The 18,936-square-foot building at 11712 Moorpark St. has 29 suites, with just one over 1,000 square feet – which surprisingly made it attractive. At the time of the sale, the building was 90 percent occupied. “It’s a really nice, attractive building, and it’s always stayed pretty full with professional offices and media companies,” said Darren Casamassima, a principal at Lee & Associates Sherman Oaks office, who represented the seller, a private family trust. He noted there are few office buildings with units that small in the area. Casamassima, the leasing manager for the past five years, added that the property is attractive as an investment since tenant improvement costs are kept low by the minimal reconfigurations possible in such small units. David Aschkenasy of Los Angeles firm Commercial Asset Group Inc. also represented the seller. The buyer, a private individual, was self-represented. Staff reporter Kelly Goff can be reached at (818) 316-3135 or [email protected]
Housing Recovery Boosts Power Center’s Price
