IRVINE, Calif. – Faris Lee Investments, a leading retail-specialized investment advisory firm, has completed the $8.1 million sale of a 25,960-square-foot property occupied by PetSmart in the southern Orange County city of Aliso Viejo.
Dennis Vaccaro and Nicholas Coo of Faris Lee Investments represented the seller, a Southern California- based partnership who had owned the property since it was constructed. Vaccaro also represented the buyer, Phoenix-based RPM Catalina & Tanque Verde, LLC.
The unique lease terms and existing debt structure on the property made for a very complicated marketing and subsequent negotiation process with prospective buyers. Faris Lee actively walked each potential buyer through the documentation in order to provide clarity on an otherwise uncommon investment. The firm generated eight offers and selected the buyer because of its understanding of the lease terms and its motivation to close quickly as it was in a 1031 exchange.
“We marketed this property as an asset with an excellent upside opportunity,” said Vaccaro. “The buyer assumed an existing loan on the property. The buyer has four years until the loan is paid off through the tenant lease payments. At that point it will own the asset free and clear. As this is an outstanding piece of retail real estate in one of the most successful centers in South Orange County, the buyer is well positioned to experience excellent appreciation in value and equity.”
Built in 1997 and situated on 2.45 acres, the single-tenant, absolute NNN-leased property is located at 26761 Aliso Creek Road. PetSmart has been a tenant at the property for the past 15 years. The property is a part of the Aliso Viejo Town Center, a 300-acre, 700,000-square-foot regional shopping center and one of the most dominant retail developments in Orange County. The center includes a 20-screen Edward’s Stadium Theatre, Ralphs Fresh Fare, Trader Joe’s, TJMaxx, Barnes & Noble, Pier 1 Imports, and others. Aliso Viejo Town Center dominates the area, while also drawing from the surrounding communities of Laguna Niguel, Laguna Hills, Mission Viejo, Lake Forest and Laguna Beach.
Faris Lee has emerged as an expert investment advisor in the south Orange County region and is the most active retail sales firm in the area participating in nearly $1 billion in property transactions over the past 15 years. In Aliso Viejo alone, the firm has completed in excess of $110 million in retail property transactions. In December 2013, Faris Lee completed a complex joint venture partnership between New York-based American Realty Capital (ARC) and Irvine, Calif.-based ValueRock Realty Partners, Inc. for the ownership of The Commons at Aliso Viejo Town Center which is valued at $50 million. The firm has also completed other notable sales including the $39 million sale of The Shoppes at Aliso Viejo; a multi-tenant property including Stadium Brewing Company; and a single-tenant Walgreens property.
Aliso Viejo Town Center is located in south Orange County, one of the most affluent regions in Southern California with the average annual household income of more than $119,000 within a five-mile radius. The city’s plan strictly limits commercial development, preventing any future overdevelopment in the area. Furthermore, the Aliso Viejo Town Center was designed and developed to be the primary shopping destination for the residents of Aliso Viejo and surrounding communities, offering big-box, grocery, lifestyle, entertainment, restaurant, and shop space in one convenient location.