January 13, 2017

Real Estate Newsletter Winter 2017

National Retail News

Rite-Aid-storesIn late December, Fred’s, a chain with 647 locations in the Southeastern US, agreed to purchase 865 Rite Aid stores for $965 million. The sale of these Rite Aid stores was required by the US Federal Trade Commission to avoid antitrust issues from the upcoming merger between Walgreens and Rite Aid.  The merger is expected to be completed in the first quarter of 2017.


A survey conducted by the International Council of Shopping Centers (ICSC) indicated that 2016 holiday retail spending was 16% higher than in 2015.  About half (46.6%) of these expenditures took place in physical stores, and 22.6% was spent through the online platforms of these retailers.  Two-thirds of survey respondents indicated they shopped at discount stores, making them the most popular shopping venue.  This is all great news for the retail industry as it continues to grow despite increasing Internet competition. See the final survey results at: http://tinyurl.com/post-holiday


Local Happenings:

New food hall coming to Rancho Cucamonga: A former 85,000 foot JC Penney in Rancho Cucamonga, which closed in 2014, will be repurposed into the Haven City Market, which will be a food hall, gourmet food market, and retail space for food and beverage boutiques and retailers, with a 20,000 square foot outdoor garden eating area.  The concept is similar to the Anaheim Packing House, and will be the first of its kind in the Inland Empire.  The project is expected to be completed in 2018. http://tinyurl.com/havencitymarket


Highway CA-91 Update: Last year, I reported on the progress of the 91 freeway construction in Corona.  The project is now over 90% complete, with new freeway lanes opening in Spring 2017.  Check out www.sr91project.info for the latest updates on road closures and construction.


Inland Empire Growth:  The IE has created 240,000 jobs since the low point of the Great Recession, and is nearly 100,000 jobs higher than before the Recession, according to John Husing, chief economist for the Inland Empire Economic Partnership.  Logistics (goods movement) accounted for 23% of new jobs created in the past 5 years – the most of any industry, thanks to business like QVC and Amazon opening distribution centers in the region.  Read more at http://tinyurl.com/iegrowth


Ontario Airport ownership returns to City of Ontario:  In late 2016, the ownership of Ontario Airport (ONT) was transferred from the Los Angeles World Airport organization back to a local authority called the Ontario International Airport Authority.  Some benefits of this change will include more flights coming in and out of the airport, more local jobs in the area, and more investment in economic development.  This will be a great change for the entire Inland Empire.  Read a more detailed analysis written by Progressive Real Estate Partners’ President, Brad Umansky, here: http://tinyurl.com/ontarioair


I’d love to hear your thoughts on this newsletter. Call or email me to let me know what you think!

Mike Lin’s Featured Listings:


Single tenant leased investment: Rite Aid in Lakewood, CA ($3,995,000) – PRIME LOS ANGELES LOCATION – 4.0% Cap Rate

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. The low rent and prime location makes this a great, low risk investment! See more at: http://tinyurl.com/riteaidlakewood


Single tenant leased investment: ROSS Dress for Less/dd’s DISCOUNTS in Ontario, CA ($4,995,000)

This is a single tenant leased investment to Ross Dress for Less, operating as dd’s DISCOUNTS, with 5 years remaining on the original lease term. Ross is rated A- by Standard & Poor’s. Priced at a 5.5% cap rate. Learn more at http://tinyurl.com/ddsdiscounts


Single tenant leased investment: Big 5 Sporting Goods in Victorville, CA ($1,730,000) or Vallejo, CA ($2,650,000)

Big 5 just renewed their options in both locations for an additional 5 years. Big 5 reports sales and has a percentage rent provision to protect against inflation. The ground rent alone is worth more than the current lease. You’ll wish that Big 5 vacates the premises! Visit http://tinyurl.com/big5vallejo or http://tinyurl.com/big5victorville


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. Prior to commercial real estate brokerage, I worked as a full-time residential real estate investor, flipping houses in Orange County.


I am a New Jersey native, and have worked for multinational 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