SRS Completes $20MM Sale of Retail Property in Stockton, CA

Originally Published: The Registry

Newport Beach, Calif. (December 6, 2018) – SRS Real Estate Partners’ Investment Properties Group has completed the $20 million sale of College Square, a 97 percent occupied 126,098-square-foot community shopping center in Stockton, Calif. The center is anchored by Hobby Lobby and Planet Fitness with other national brands including freestanding buildings occupied by Wienerschnitzel and Outback Steakhouse as well as a diverse tenant mix of daily services and necessity-based retailers.

SRS’ Investment Properties Group Senior Vice President Chris Tramontano, Vice President John Redfield and Executive Vice President Tom Power represented the seller, a Northern California-based private partnership. The buyer was a Southern California-based private investor in a 1031 exchange and was self-represented. Additionally, Ben Townsend and Matt Marlin of SRS’ Debt & Equity team structured a high leverage, non-recourse loan with a favorable reserve structure that allowed the new ownership to receive a cash-on-cash return of approximately 10 percent.

“SRS was selected to sell this property after it was previously marketed with a different firm,” said Redfield. “It was crucial that we rebrand the asset and focus on its intrinsic value at this location, strong anchors, and below market rents to appeal to potential buyers. Stability of cash flow with near and long-term upside were some of the key factors that helped us bring significant interest from the market, drawing from our strong investor database to create a new buyer pool.”

Tramontano adds, “Ultimately, SRS was able to identify and secure a motivated 1031 exchange buyer out of Southern California that was looking for a quality location with good yield. SRS’ Debt & Equity team worked with the buyer to structure a loan in a very challenging and fast-changing interest rate environment.”

Built in 1976 with its most recent renovation in 2012, College Square is situated on 11.96 acres at 4756 Pershing Avenue at the busy intersection of March Lane and Pershing Avenue which sees more than 68,000 vehicles daily. The property is next to Target and is also near Sherwood Mall, a 525,000-square-foot mall anchored by Macy’s, Best Buy and Petco. It is also adjacent to San Joaquin Delta College and is in a dense infill area with a population of more than 305,000 people within a five-mile radius.

The City of Stockton is the 13th largest city in California and has a low retail vacancy rate at approximately 4 percent. The city is proximate to San Francisco and Silicon Valley and provides an excellent highway system that connects it to all major California markets.