127,000 SQ FT Hammer Crossings Retail Park in Stockton on Sale for $20MM

Central Valley, Hammer Crossings, CBRE, Northern California, Red Mountain Group, Stockton, Altamont Corridor Express

By Jelena Krzanicki

In the supply-constrained retail investment market in Central Valley, particularly for high-quality assets, the 127,198 square-foot retail park known as Hammer Crossings may come as an opportunity for investors looking to expand their footprint in this Northern California city. The property is offered up for sale for $20,019,000 or $157 per square foot, and it provides a parcel of 12.43 acres with 70 parking spaces. 

The retail park is offered for sale by Red Mountain Group, an established retail redevelopment industry leader, with a current portfolio of more than 4.7 million square feet located across 18 states. The asset is marketed by CBRE’s Newport Beach office, and the marketing efforts are led by Senior Vice President John Read and Associate James Tyrrell. 

The Class B single-story retail park was originally built in 1991 and is fully occupied, 80 percent of which is by publicly-traded credit tenants like Burlington and Ross Dress for Less. According to CBRE marketing materials, Burlington has occupied the property since 2007 with positive sales trends and Ross Dress For Less since 2017. Property-wide, rents at Hammer Crossings are only $0.99 per square foot per month, estimated to be approximately 13 percent below the current market rate, with Ross Dress For Less paying only $0.73 per square foot per month in rent.

Hammer Crossings is located at 3702 East Hammer Lane just off State Route 99, in the main retail hub for this Stockton trade area. Neighboring retailers include Walmart, Home Depot, Lowe’s, Dollar Tree, Dunn-Edwards, 4 Wheel Parts, McDonald’s, and many others including Stockton Auto Mall. The property is also located a short driving distance from Stockton Commuter Rail (Altamont Corridor Express). 

According to the CBRE Central Valley Industrial Figures Report for 4Q22, the Central Valley industrial market experienced the highest net absorption on record for a single year, posting 11.8 million square feet of positive net absorption in 2022. However, vacancy and availability rates rose in the fourth quarter, as well. Two speculative developments totaling 846,908 square feet were delivered to the market and the construction pipeline remains robust with 8.4 million square feet of new developments currently underway. Leasing transaction volume for the quarter totaled over 1.9 million square feet with new leasing activity accounting for 69 percent of all transactions. 

Gross leasing activity was strong in the fourth quarter of 2022 with 1.9 million square feet of lease transactions. Stockton recorded the largest transaction of the quarter with Costco signing a 780,393 square feet renewal at 2115 South Sinclair Avenue, Stockton, according to CBRE’s reporting. The next largest transaction was a 198,581 square feet new lease signed by McCollisters at 6751 West Schulte Road in Tracy. Of the top 10 transactions completed in the fourth quarter of last year, 7 were new leases and 3 were renewals. On the capital markets side, Lowenberg Corp. closed on the largest sale of the quarter at 18231 Murphy Parkway in Lathrop, a 198,183-square-foot facility. The building was sold by Overton Moore Properties for just around $30 million, or roughly $152 per square foot.

Occupier demand was robust in 2022, with 11.8 million square feet of net absorption for the year. This marked the highest net absorption on record for a single year in the Central Valley and the 40th consecutive quarter of positive absorption, CBRE’s report stated. Net absorption in the fourth quarter of 2022 ended with 433,032 square feet, most of which occurred in the Lathrop and Tracy submarkets. The largest move-in of the quarter occurred at 3160 North Chrisman Road in Tracy; Victory Packaging moved into 209,960 square feet of the 309,108-square-foot building. Despite turbulence on the capital markets front, fundamentals on the leasing front are expected to remain strong in 2023, CBRE concluded.

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