Hanley Investment Group Real Estate Advisors, a nationally recognized real estate brokerage and advisory firm specializing in retail property sales, announced today that the firm arranged the sale of a new construction, multi-tenant retail pad at Monterey Crossing, a newly developed shopping center at the Interstate 10 and Monterey Avenue interchange in Palm Desert, California. The sale price was $6.34 million. This transaction marks the fifth retail pad building Hanley Investment Group has sold at Monterey Crossing, totaling a combined 25,430 square feet and approximately $27 million.
Hanley Investment Group’s Executive Vice Presidents Bill Asher and Jeff Lefko represented the developer and seller, Fountainhead Development of Newport Beach, California, in all five retail investment transactions.
The most recent transaction was a 2022-construction, 100%-leased, 8,370-square-foot multi-tenant retail pad building on 1.18 acres situated at the hard corner signalized intersection of Monterey Avenue and Dinah Shore Drive in Palm Desert. Located at 3120 Dinah Shore Drive, the pad building is occupied by a mix of internet-resistant tenants that include Jersey Mike’s Subs, Nekter Juice Bar, Roll-Em-Up Taquitos, Keith Alexander, DDS, and Mathnasium. The buyer, a private investor from Los Angeles, was represented by Yoram Katz of Peak Commercial in Woodland Hills, California.
“We generated multiple qualified offers and procured a private 1031 exchange buyer seeking a passive multi-tenant triple-net retail investment with long-term leases in a prime, high-traffic location,” Asher noted.
“We successfully closed escrow with the buyer securing new financing and closing escrow in the final days of their 1031 exchange period, in one of the more challenging capital market environments we’ve experienced in over a decade,” said Asher.
Asher added, “Two of the five tenants were not open for business at the close of escrow, including one tenant not yet paying rent. We structured a holdback at closing to cover any rent not collected from close of escrow until the tenant’s formal rent commencement date.”
Previous sales at Monterey Crossing facilitated by Hanley Investment Group included two brand new, single-tenant ground leased pads to Chick-fil-A Drive-Thru and Quick Quack Car Wash, a brand new, single-tenant net-leased investment The Habit Burger Grill with a drive-thru, along with a two-tenant pad building occupied by AT&T and Spectrum. All four properties were sold to four separate buyers at record-low cap rates.
Monterey Crossing is strategically located adjacent to Interstate 10 freeway, one of the most centrally located and heavily visited interchanges (110,000 cars per day) in the Desert Cities area of Southern California and a primary east/west arterial connecting to Los Angeles to San Bernardino County, Riverside County and Phoenix, Arizona. The property is ideally situated at the signalized intersection of Monterey Avenue and Dinah Shore Drive (57,000 cars per day) and is the major north/south connector between the freeway, resorts and high-income communities of Palm Desert, Rancho Mirage and Cathedral City.
Fountainhead is currently developing an additional single-tenant pad in the first phase of the project in addition to a second phase of the shopping center, which combined will ultimately feature 17 acres of best-in-class retail.
Monterey Crossing also benefits from freeway-visible pylon signage and was the first Palm Desert center to be approved for freeway signage, according to Asher.
National tenants located at the intersection of Monterey Avenue and Interstate 10 include Costco, Home Depot, Kohl’s, Sam’s Club, Walmart Supercenter, 99 Cents Only, Ashley HomeStore, JOANN Fabrics and Crafts, PetSmart and Regal Cinemas.
Palm Desert is the Coachella Valley’s geographic center, a fast-growing Southern California region. Within a three-mile radius of Monterey Crossing, the population increased by 53% between 2000 and 2020 and is projected to grow an additional 7.4% by 2025. The average household income is currently $106,000. More than 4,500 new residential units are planned or under construction within a 2.5-mile radius of Monterey Crossing.
“We anticipate developers and shopping center owners will continue to see the accretive value of implementing a break-up sale strategy to capitalize on the demand for single-tenant and multi-tenant retail pad product,” said Asher.
Hanley Investment Group has sold $1.8 billion in retail properties in the Inland Empire, including $467 million in volume in the last 48 months.
About Hanley Investment Group
Hanley Investment Group Real Estate Advisors is a real estate brokerage and advisory services company with over a $10.5 billion transaction track record that specializes in the sale of retail properties nationwide. Our expertise, proven track record, and unwavering dedication to putting clients’ needs first set us apart in the industry. Hanley Investment Group creates value by delivering exceptional results through the use of property-specific marketing strategies, cutting-edge technology, and local market knowledge. Our nationwide relationships with investors, developers, institutions, franchisees, brokers, and 1031 exchange buyers are unparalleled in the industry, translating into maximum exposure and pricing for each property. With unmatched service, Hanley Investment Group has redefined the experience of selling retail investment properties. For more information, visit www.hanleyinvestment.com.