A single-tenant downtown San Diego retail condo property occupied by an Albertsons grocery store traded as part of a 1031 exchange, according to Marcus & Millichap, whose affiliate The Mansour Group brokered the deal. The nearly 43,000-square-foot building, at 655 14th St., sold for $22.1 million.
The property is within walking distance of Petco Park, home of the San Diego Padres, and is surrounded by hotels, new apartment communities, the San Diego Convention Center, offices, restaurants, shops and entertainment venues.
Alvin Mansour and Kevin Mansour of Marcus & Millichap and Pasquale Ioele and Michael Burton of Flocke & Avoyer Commercial Real Estate represented the seller, a San Diego ownership group. The buyer, 221 North Cedar Associates LP, is based in Los Angeles and sold a large apartment community in metro Los Angeles. Chris Thompson and David Leibowitz of IREA represented the firm in the San Diego deal.
In a prepared statement, Alvin Mansour, executive managing director/investments of The Mansour Group of Marcus & Millichap, said the property has a long-term triple net lease. He added that the buyer was “a Southern California private investor exchanging from a large multifamily complex into a passive and generational net-leased property.”
Search for safety
In addition, Mansour shared with Commercial Property Executive some observations on the net-lease market: “Many apartment owners are looking to transition from management-intensive properties to the safe haven that is passive net-lease investments. Private apartment sellers are the most active buyers of net-leased investment properties in the $20 million and under space.”
“In recent years, investors have been competing aggressively in the $20 million to $100 million-plus net-leased space, and again we see a lot of this 1031 capital coming out of substantial multifamily assets,” Mansour added. “As we saw in the previous recession, and it’s proving true today, private capital continues to be very aggressive in this market and will be most active throughout a possible long downturn.”
In a commentary for Commercial Property Executive less than two weeks ago, Tom Georges, a director of Stan Johnson Co., said he expected renewed interest in both 1031 exchanges and in net-lease assets as the commercial real estate industry continues to adjust to the initial shock of the COVID-19 pandemic.