April 22, 2017

Real Estate Newsletter Spring 2017

National Real Estate News:

Elimination of the 1031 Exchange?

Tax reform is usually very boring, but listen up – this is important!  There is currently a bill to reform the tax code, called the House Republican Blueprint for Tax Reform, which may result in the elimination or limitation of the 1031 tax-deferred exchange.  No one is sure yet if the 1031 Exchange will survive the many financial changes being made by the Trump administration.  Since every property owner can potentially be affected by any changes to this tax law, it is important to keep up-to-date on this topic.  Contact me to talk about the latest news, or read more at http://www.1031taxreform.com/1031repealissue-2/


Local Happenings:

Haven-City-MarketBig Al’s is here, and it’s awesome:  Many landlords have recently had the challenge of filling vacant big box spaces.  Last newsletter, I talked about the Haven City Market, a gourmet food hall that will be taking over the 85,000 square foot former JC Penney in Rancho Cucamonga.  Progressive Real Estate Partners is handling the leasing on the anchor tenant for the market.  Another new concept to the area to occupy a big box space is Big Al’s.  Big Al’s has taken over the former 45,000 square foot Best Buy in the Piemonte at Ontario Center at 4120 E 4th St., Ontario.  I had lunch there on March 16th, the day it opened for business.  It is an entertainment destination with arcade games, bowling lanes, billiards, shuffleboard, and a stadium-style seating sports bar with a huge 55-foot TV.  This is Big Al’s fourth location and first in California.  It’s a great location to watch a baseball game, have a birthday party, or host a company event.  In fact, Progressive Real Estate Partners will be having its company outing at Big Al’s.  As more and more big box spaces are coming vacant, concepts like Big Al’s and the Haven City Market are creatively repurposing these spaces.  Learn more at http://www.ilovebigals.com and http://tinyurl.com/havencitymarket


New Highway CA-91 Lanes are Open: On March 20, 2017, after three years and $1.4 billion of construction, the new CA-91 freeway lanes finally opened.  Two toll lanes and one general lane in each direction were added.  More construction will be ongoing throughout 2017 to finish up the project.  This route is traveled by 280,000 cars per day, and about 30,000 cars are using the new toll lanes each day.  By 2035, an additional 140,000 cars a day are expected.  I drive this route every day, but in the direction opposite of traffic, so unfortunately I have not noticed much difference in my commute time, although I’m sure congestion has eased for drivers heading the opposite direction of me.  Check out www.sr91project.info for the latest updates on road closures and construction.


Job growth in the IE continues to rise, but retail jobs are suffering: The Inland Empire added jobs in February 2017 and its employment rate dropped, according to the CA Employment Development Department.  California continues to lead the nation in year-over-year job growth. The IE’s unemployment rate was 5.3% in February, down from 5.6% in January 2017, and 5.9% in Feb. 2016. However, most of these new jobs are in construction, andthe retail sector continues to lay off more workers, due in part to big box retailers closing down. Macy’s plans to close 68 stores, JC Penney will close 138 locations, and Sears and Kmart will be closing 150 stores.  Of these big box closings, one is located in the IE – a Kmart at 3001 Iowa Ave. in Riverside.  For the full report, visit http://tinyurl.com/iejobs2017

Mike Lin’s Recently Sold Listings:


Single tenant leased investment: Rite Aid in Lakewood, CA – PRIME LOS ANGELES LOCATION

Rite Aid has been in this location for almost 30 years and pays only $0.78/sf, well below market rates. The property is located in a Vons-anchored center, on a busy corner. We received a lot of interest in this property and it was sold to a private investor.

SOLD ON 1/6/17 for $3,500,000 – 5.1% Cap Rate


Single tenant leased investment: ROSS Dress for Less/ dd’s DISCOUNTS in Ontario, CA ($4,775,000)

This is a single tenant leased investment to Ross Dress for Less, operating as dd’s DISCOUNTS, with 5 years remaining on the lease term. Ross is rated A- by Standard & Poor’s. Priced at a 5.75% cap rate.


Single tenant leased investment: Big 5 Sporting Goods in Victorville

Big 5 just renewed their option for an additional 5 years. Big 5 reports sales and has a percentage rent provision to protect against inflation. I procured a buyer for this property who recognized the property’s location in front of the Victor Valley Mall.

SOLD ON 1/6/17 for $1,580,000 – 4.9% Cap Rate


Value-Add Shopping Center in Ontario, CA ($3,200,000)

This property is 62% vacant and occupies almost an entire city block. It is anchored by Secoya Grocery market and other tenants were Papa John’s and Wells Fargo. We received multiple full price cash offers and ultimately sold the property to the City of Ontario.


About me:

I specialize in representing buyers and sellers of retail investment properties, focusing primarily on the Western Inland Empire, encompassing the cities of Corona, Norco, Eastvale, Ontario, Chino, Chino Hills, Montclair, Claremont, and Pomona. Prior to commercial real estate brokerage, I worked as a residential real estate investor, flipping houses in Orange County.


I grew up in New Jersey, and have worked for corporations such as Nestle PowerBar, Prudential, and Computer Sciences Corporation. I have a degree in Biomedical Engineering from Johns Hopkins University and an MBA from Duke University.



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Mike Lin, CRE