FONTANA. Calif. – Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm has arranged the sale of two multi-tenant retail pad buildings at Highland Village Shopping Center, a new Sprouts-anchored shopping center in Fontana, California. The two buildings, which totaled 13,515 square feet, closed at over $11 million. This transaction marks the eighth property Hanley Investment Group has sold at Highland Village, totaling a combined 61,123 square feet and approximately $40.8 million in total sales.

Hanley Investment Group’s Executive Vice Presidents Kevin Fryman, Bill Asher and Jeff Lefko represented the seller, Adler Realty Investments, who completed the ground-up shopping center development in 2018-2019. The buyer was a private 1031 exchange investor based in Beverly Hills, California and was represented by Mark Stein of CPMC Realty in Palm Desert, California.

“Retail developers continue to capitalize on executing the break-up sale strategy due to the consistent high-level of demand from investors seeking new construction single-tenant and multi-tenant pads in today’s market,” said Fryman. “The sales of the two multi-tenant pad buildings at Highland Village were a prime example of matching up a retail investment not formally on the market yet with a specific investor’s acquisition criteria seeking to complete a 1031 exchange. We were able to identify and procure the buyer in an off-market transaction and effectuate a year-end closing to achieve both parties’ objectives.”

The two multi-tenant retail pad buildings are located at 16918-16938 South Highland Avenue on an outparcel to a 30,000-square-foot Sprouts Farmers Market at the hard-corner, signalization intersection of Highland Avenue and Sierra Avenue. The pad tenants include Cafe Rio, Jersey Mike’s Subs, Fatburger, Oggi’s Pizza, AB Barber and Crumbl Cookies. Other tenants at the shopping center include Sit ‘n Sleep, Raising Cane’s Chicken Fingers, Jack in the Box, Pacific Dental, Quick Quack Car Wash and Mountain View Tire & Auto Service. The shopping center is immediately adjacent to the 210 Freeway at the Sierra Avenue entrance/exit.

Hanley Investment Group’s Fryman, Asher and Lefko previously arranged the sale of an 8,400-square-foot Sit ‘n Sleep, a 7,500-square-foot multi-tenant retail shop building adjacent to Sprouts, a Quick Quack Car Wash ground lease; plus the sales of Sprouts, Mountain View Tire & Auto Service, Raising Cane’s and Jack in the Box, each as separate, single-tenant transactions at Highland Village Shopping Center. Hanley Investment Group’s sale of Quick Quack Car Wash was the first single-tenant Quick Quack to sell as a net-leased investment in California.

“We were able to maximize value for the seller through individual sales to private, non-institutional investors in a price range of approximately $2 million to $11 million, a price range that greatly appeals to the largest buyer pool in the retail investment industry,” said Fryman. “Investors recognized that this shopping center and its location and demographics offered long-term security and stability in a continued growth area.”

Fryman added that there are 325,000 people within a five-mile radius and an average household income of $89,000 within a one-mile radius of the shopping center.

“Investor demand for well-located, multi-tenant retail properties leased to nationally and regionally recognized internet-resistant tenants was at unprecedented levels in the second half of 2021,” said Asher. ”We expect this demand to continue in 2022, especially as an alternative investment and opportunity to acquire retail at a higher return compared to the highly compressed cap rates found in the single-tenant market.”

About Hanley Investment Group

Hanley Investment Group Real Estate Advisors is a real estate brokerage and advisory services company with an $8.9 billion transaction track record that specializes in the sale of retail properties nationwide. Our expertise, proven track record, and unwavering dedication to putting clients’ needs first set us apart in the industry. Hanley Investment Group creates value by delivering exceptional results through the use of property-specific marketing strategies, cutting-edge technology, and local market knowledge. Our nationwide relationships with investors, developers, institutions, franchisees, brokers, and 1031 exchange buyers are unparalleled in the industry, translating into maximum exposure and pricing for each property. With unmatched service, Hanley Investment Group has redefined the experience of selling retail investment properties.

FONTANA. Calif. – Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm has arranged the sale of a new construction, single-tenant Sprouts Farmers Market at the Highland Village Shopping Center in Fontana, California. The sale price was $10.4 million, representing a 5.19% cap rate, a record-low cap rate and a record-high price per square foot for a single-tenant grocery store in the Inland Empire.

Hanley Investment Group’s Executive Vice Presidents Kevin Fryman, Bill Asher and Jeff Lefko represented the seller, Adler Realty Investments, Inc., based in Woodland Hills, Calif. The buyer, a private investor, was represented by Heidi Kim of TNG Real Estate Consultants of Brea, California.

Adler Realty Investments recently completed the ground-up shopping center development, which is anchored by a 30,000-square-foot Sprouts Farmers Market, and also includes Burgerim, Jack in the Box, Raising Cane’s Chicken Fingers, Jersey Mike’s, Café Rio, Oggi’s Restaurant, Mountain View Tire & Auto Service, Pacific Dental and Quick Quack Car Wash (currently under construction). The property is immediately adjacent to the 210 Freeway at the Sierra Avenue entrance/exit.

According to Fryman, Highland Village enjoys exposure to a high volume of commuters and local residents that travel along the 210 Freeway, one of the major east/west freeways connecting California’s San Gabriel Valley and Inland Empire. The average daily traffic count is approximately 119,000 at the Sierra Avenue exit. The freeway-visible pylon sign provides outstanding exposure, identity and visibility for Sprouts and the entire shopping center by eastbound and westbound traffic.

“Highland Village Shopping Center is located directly across the street from Fontana Auto Center and the Fontana Promenade, the site of a future new Walmart Supercenter, which will drive a tremendous volume of regional traffic to an already busy area,” Fryman added.

“We generated a tremendous volume of interest in the Sprouts including procuring multiple competitive and qualified offers,” Asher stated. “We secured an all-cash, non-1031 exchange buyer and negotiated a longer escrow to allow time to complete the parcel subdivision to sell the Sprouts separately.

“With the sale of Sprouts, we helped the seller maximize value by executing another break-up sale at Highland Village and achieved approximately 75-100 basis points better than if the owner sold the shopping center as a whole,” Asher said. “Previously, we sold the Mountain View Tire & Auto Service, Raising Cane’s Chicken Fingers and the Jack in the Box, each as separate, single-tenant transactions at the shopping center. We now are marketing for sale a new single-tenant Sit ‘n Sleep and a new 7,500-square-foot, three-tenant, retail shop building located next to Sprouts with tenants Pacific Dental Services, Arrowhead Credit Union and MJ Nail Salon.”

Asher continues, “The new-construction Sit ‘n Sleep and the shop building represent two excellent opportunities to acquire newly constructed retail assets in a freeway-visible, dominant retail trade area with affluent demographics in a growing residential and industrial/commercial area.”

Fryman adds, “National and regional tenants also located at the Sierra Avenue exit include Costco, Home Depot, JOANN, LA Fitness, Lowe’s, OfficeMax, Petco, Ralphs and Walgreens. A newly developed 430,000-square-foot shopping center is located nearby along Highland Avenue, anchored by 24 Hour Fitness, Burlington, Cinemark, Grocery Outlet, Old Navy, Ross Dress for Less, and ULTA Beauty, drawing additional regional traffic.”

Approximately 10,000 new residential units are proposed to be built within 2.5 miles of Highland Village Shopping Center including Ventana at Canyon Duncan, a 105-acre master-planned mixed-use community with 842 residential units, 360,000 square feet of office/business park space, and 128-room hotel space; and Westgate Specific Plan, a 954-acre development with 3,751 residential units and 1.2 million square feet of warehouse space; and The Renaissance, a 1,439-acre, master-planned, mixed-use redevelopment project with 1,700 housing units, 500,000 square feet of retail space, and 3.9 million square feet of industrial space, which includes distribution centers for Amazon, Black & Decker, Niagara Water, Monster Beverage, Target, and Under Armour. Golden State Foods opened a 183,000-square-foot distribution center in Fontana in July 2018. The City of Fontana has received “Top Workplace” honors three years in a row, 2019, 2018 and 2017.

Fontana is the 2nd largest city in San Bernardino County and is projected to grow by 7.5% between 2017-2022. According to the City of Fontana Mayor, Acquanetta Warren, Fontana is expected to be the largest city in San Bernardino County after Census 2020.

Fontana is the #2 “Financially Strongest City with a Population of More than 200,000” (Fiscal Times, 2017). There are currently 320,000 people within a five-mile radius and an average household income of $82,000 within a one-mile radius of the Highland Village Shopping Center. Within one mile of Highland Village, the population is expected to grow 16% between 2017-2021.

Sprouts Farmers Market (NASDAQ: SFM), one of the fastest-growing retailers in the country, has made healthy living accessible to shoppers for nearly two decades by offering affordable, fresh, natural and organic products. True to its farmers market heritage, Sprouts is known for pioneering its unique grocery model by offering a welcoming store layout featuring fresh produce at the center of the store, an expansive bulk foods section, and a vitamin department focused on overall wellness. Sprouts also offers a unique assortment of healthier products with special attributes, such as plant-based, gluten-free, keto-friendly, and grass-fed, to meet the growing and diverse needs of today’s consumer. Headquartered in Phoenix, Arizona, Sprouts employs more than 30,000 team members and operates over 340 stores in 22 states from coast to coast.

About Hanley Investment Group

Hanley Investment Group Real Estate Advisors is a retail investment advisory firm with a $6+ billion transaction track record nationwide, who works closely with individual investors, lending institutions, developers, and institutional property owners in every facet of the transaction to ensure that the highest value is achieved. For more information, visit www.hanleyinvestment.com.

Adler acquired the property in 2005 and completed a building renovation and maintained high occupancy during its fifteen years of ownership. Adler brought in signature tenants such as Omni Healthcare, Regus, Progressive Insurance and Principal Life. Adler recently upgraded the building’s energy systems, which included a solar installation with covered carports making it one of the most energy efficient buildings in Bakersfield.

The investment provided Adler’s investors cash flow and substantial appreciation over the ownership period. “We are pleased with the success of the investment,” said Michael Adler, president of Adler. “This venture is a typical transaction for our business. We acquired an under-performing property, executed our business plan to improve and stabilize the asset, resulting in higher values.”

Adler continues to look throughout the western United States for other value-add office, industrial, and retail opportunities. Alex Belfour, Jeff Andrew, Scott Salters, and Susan Moreno of Cushman & Wakefield represented the seller in the transaction.

Adler, who acquired the project in 2003, fully renovated the buildings systems and common areas over the years while maintaining high occupancy. Adler successfully restructured the debt to enable the company to carry the project through the economic downturn.

“We are happy with the recovery of the property’s value since the collapse of the real estate market, and the cash flow produced from the property during our ownership” said Michael Adler, president of Adler Realty Investments. “while we owned the property for a longer period than originally anticipated, our commitment and expertise allowed us to provide a nice profit to our investors “

The sale was an off market transaction with Noel Aguirre, of Lee & Associates and Jorge Yamzon of Remax , bringing the sale together.

Four of the buildings are located on Brundage Street off of route 58; and two are located on District Avenue a mile west of route 99. Current tenants include Crystal Geyser, Bimbo Bakeries, On-Trac, and Bilfinger Industries to name a few..

The sale of the project provided Adler’s investors a 20% annual rate of return(IRR) over the three and a half year ownership period. “We are pleased with the success of the investment,” said Michael Adler, president of Adler. “This venture is a typical transaction for our business. We acquired an under-performing property, executed our business plan to improve and stabilize the asset, thereby resulting in higher values and above market returns for our investors.”

Adler is aggressively looking throughout the western United States for other value-add opportunities. Patrick Barnes, Rich Putnam, and Bret Hardy of Colliers International, represented the seller and buyer in the transaction.