Strong Demand for Grocery-Anchored Retail Properties in Southern California: Plaza Pacifica
The allure of grocery-anchored retail properties continues to drive investor interest, particularly in the affluent markets of Southern California. A prominent opportunity has emerged in San Clemente with the listing of the Plaza Pacifica shopping center, a strategically positioned retail hub that captures the region’s economic vibrancy. Spanning 23,679 square feet at 979 Avenida Pico, this shopping center is now available for $23.25 million, or about $982 per square foot, as per a marketing brochure from Faris Lee Investments, the firm handling the sale.
A Prime Investment Opportunity
The Plaza Pacifica property, established in 2002 on 2.43 acres, generates a net operating income of $1.16 million annually, reflecting a solid 5 percent capitalization rate. Accompanying this attractive financial profile is an assumable loan offering a 4.4 percent fixed interest rate with interest-only payments through May 2029. This financial structure is particularly appealing for investors aiming to navigate the current landscape of elevated borrowing costs.
Grocery Anchor & Tenant Mix
Additionally, Plaza Pacifica operates as a shadow-anchored grocery development, conveniently located next to a newly renovated Pavilions supermarket. Owned by Albertsons, the Pavilions store was successfully upgraded through significant capital investments, thus enhancing the overall appeal of the area. The tenant mix within Plaza Pacifica is robust and includes well-known brands such as Board & Brew, Baja Fresh, Verizon Wireless, AT&T, Navy Federal Credit Union, and Mattress Firm. This diverse collection of tenants adds resilience and stability to the rental income structure, which is crucial for any retail investment.
Demographics Supporting Pricing
The demographic profile surrounding San Clemente supports the asking price of Plaza Pacifica. The average household income exceeds $195,000 within a three-mile radius, indicating strong purchasing power. More than 100,000 permanent residents and 35,000 daytime workers live within a five-mile radius of the property, further bolstering its attractiveness as a retail location. The shopping center’s proximity to a 299-acre business park with a remarkable 98 percent occupancy rate enhances its standing as a vital retail destination in the area.
Resilience Amid Economic Uncertainty
As economic conditions fluctuate, grocery-anchored retail properties have proven to be resilient and attractive investment options. Investors are increasingly recognizing the stability offered by these centers, particularly in affluent coastal regions where consumer spending remains strong. The Plaza Pacifica listing emphasizes its shadow-anchor relationship with Pavilions, which not only assures a steady rental income but also potentially lowers acquisition costs compared to properties with direct anchors.
Marketing the Property
The marketing of Plaza Pacifica is spearheaded by Donald MacLellan and Alec Patterson of Faris Lee Investments. With their expertise in retail property transactions, they aim to connect potential buyers with an investment that stands to benefit from both its location and tenant stability in a thriving market.
In conclusion, Plaza Pacifica is not merely a shopping center; it symbolizes the ongoing demand for grocery-anchored retail properties in affluent Southern California. With a sound financial structure, robust tenant mix, and supportive demographics, investors looking to capitalize on the retail market should consider this opportunity seriously. The Plaza Pacifica offering exemplifies the potential benefits of investing in a consistent sector, even in uncertain economic times.
For more insights on retail investments and market trends, check out our resources at The Registry Southern California Real Estate News.
