IRVINE, Calif. – Faris Lee Investments, a leading retail advisory and brokerage services firm, has completed the $7.64 million sale of Foothill Center, a 19,400-square-foot multi-tenant shopping center located in the south Orange County city of Lake Forest. The center is 95 percent occupied with tenants including Baja Fresh, Enterprise Rent-A-Car, and Wasabi Sushi.
Matthew Mousavi and Patrick Luther of Faris Lee Investments represented the seller, The Mayfield Trust out of Los Angeles. The China-based buyer represented itself in the transaction. The sale price had an in-place cap rate of 4.81 percent, a record low for a non-anchored retail strip center sale in south Orange County according to CoStar.
“Faris Lee conducted an extensive marketing campaign to target foreign investors, particularly the Asian investor,” noted Mousavi, senior managing director with Faris Lee Investments. “We have a proprietary database of Asian investors, brokers, asset managers, and other gatekeepers to this highly active buyer pool.”
Mousavi added: “We positioned the property as a unique opportunity to acquire a self-contained strip center in a master-planned community with upside potential through property improvements and leasing up of the remaining space, as well as by bringing rents up to market rates as the current leases expire within the tenant base.”
The firm managed a complicated loan defeasance on the property. The existing 10-year conduit loan had a near-term maturity in 2016, and either needed to be assumed or defeased at a high cost. Faris Lee was able to source multiple buyers willing to assume the existing debt and defease the loan. Ultimately, the buyer paid for the defeasance and all its related costs and fees.
Built in 1990 and situated on 2.47 acres, the center is located just north of Interstate 5 and Highway 241 at 20641-20671 Lake Forest Drive. Foothill Center is well-located in a high barrier to entry location that not only has a strong surrounding residential population of more than 102,000 people within a 3-mile radius, but also has a sizeable daytime employee population of an estimated 9,800 employees. The property’s location is also complemented by other nearby national retailers including The Home Depot, Target, Carl’s Jr., Regal Cinemas, and Staples.