Recent reports show an uptick of just under three percent in sales prices per square foot in the Los Angeles area retail market for the second quarter of 2023. Despite this encouraging data, one property that has remained for sale is the 42,800-square-foot shopping center located at 17500 Carmenita Road in Cerritos, Calif. The current sale price stands at $13.995 million, or approximately $350 per square foot.
Wally Courtney from Anaheim-based Paul Knott Realtors, Inc. has been tasked with the sale of the property. According to public records, the property has been owned by a private family trust since 2015, when it was acquired for $9.6 million.
The retail asset was initially constructed in 1971 and is home to three long-term tenants: Dollar Tree, Bank of Hope and Daniel’s Home Furnishings. According to the marketing materials reviewed by The Registry, the current cap rate for the shopping center is 5.5 percent and the current net operating income is just under $770,000 per year. The current tenant’s rents have been increasing on average three percent per year and two of the tenants recently exercised their optional lease extension.
The property is located close to California State Route 91, known as Artesia Freeway, on one side and US Interstate Highway 5 on the other, giving it great local and regional access to transportation links. The neighboring Cerritos Towne Center is also home to a few other major retail outlets, such as Best Buy, Trader Joe’s and a Walmart Supercenter.
According to a recent Kidder Mathews report, the Los Angeles-area retail market shows vacancy, unemployment, rental rates and construction deliveries all trending up in the second quarter of 2023. New construction in particular has seen a significant surge of almost 77 percent in this quarter compared to numbers from a year ago, while under construction projects are down slightly. The report further states that the average sales prices have shown signs of recovery in this quarter, up around 2.5 percent from a year ago, at around $450 per square foot. The top sales transaction recorded this quarter was the sale of the 50,000-square-foot property known as Malibu Village in Malibu, which traded for $81.5 million or just over $1,600 per square foot.
With little under construction projects in the immediate area around Cerritos, the Carmenita Road retail asset offers a potential opportunity for an investor looking to enter the market from the current available properties and at a price that is below the current average market rate.
