The Inland Empire retail sector has recently seen rising sales prices and rental rates. One leased retail investment property that may test the market conditions has hit the market in Riverside County. The 55,400 square foot asset is located on just over 4.5 acres of land at 78-850 CA-111 in Coachella Valley’s city of La Quinta. The property is listed for sale at $12.38, or approximately $223 per square foot.
Tanner Engelage and Mark Lucescu of Lucescu Realty are heading up the marketing efforts.
The Class A single-story building was built in 2014 is currently fully occupied by Hobby Lobby on a 15-year lease. Hobby Lobby opened its first retail location in 1972 and has since become the largest privately owned arts and crafts retailer in the country with over 1,000 stores in 48 states. It has been a tenant at this location since the shopping center’s inception in 2014. The remaining term on the lease is approximately six years, more specifically until the end of year 2029. Four five-year options and rental bumps are included in the current lease agreement. The marketing materials show the current cap rate at 5.75 percent and the net operating income at just over $712,000 per year.
The retail asset is located within the One Eleven La Quinta Center. The One Eleven shopping center is the main necessity retail outlet in the area and some of its major tenants include Kohl’s, Stater Bros, Ross Dress for Less, Petco, Staples and others. The property is located along California State Route 111, the primary thoroughfare for the entirety of Coachella Valley, bounded by Washington Street and Adams Street. Many other major retail outlets are located in the neighborhood of One Eleven La Quinta, such as Target, Lowe’s, Walmart, The Home Depot, Costco, Century Theatres, Best Buy, Sprouts, Amazon Fresh, Trader Joe’s, Vons and T.J. Maxx to name a few.
When considering the whole of the Inland Empire retail market, Kidder Mathews recently reported a drop of almost 78 percent in new construction projects, with steady increases to both asking rental rates and asking sales prices. Kidder’s Inland Empire Retail Market Trends report for the last quarter of 2023 shows average asking rental rates higher by four percent year-over-year and average sales price higher by almost 10 percent year-over-year at $331 per square foot.
Kidder Mathews also reported the most significant sale transaction in Coachella Valley in the fourth quarter of 2023 was that of the 77,900 square foot Komar Desert Center, which was purchased by The Festival Companies for $26.4 million, or approximately $339 per square foot. This was followed by the sale of 23,000 square foot Jefferson Plaza to PV Ocean View LLC for a total of $6.9 million or approximately $300 per square foot.
