By Meghan Hall
A shopping center in the Silicon Valley town of Los Gatos, Calif., has sold, highlighting investor interest in well-located retail assets. In a deal that closed February 15th, the El Gato Village shopping center sold for $36 million, or about $632.27per square foot. The buyer of the property was El Gato 15 LLC, an entity associated with the Prado Group.
Located at 15690 Los Gatos Blvd., the property totals 3.36 acres and is developed with 58,519 square feet, according to an offering memorandum obtained by The Registry. The property was sold by Los Gatos Musich LLC, which is associated with private investors in Hillsborough, Calif., and traded at a 4.05% CAP. Levin Johnston and Taycon Real Estate’s Marko Buljan co-listed the property on behalf of the seller.
“15690 Los Gatos Blvd. is a stunning retail opportunity located in the thriving city of Los Gatos, California,” the “The investment appeal of this asset is largely driven by its strong location, the ongoing success of grocery-anchored centers, and the solid employment fundamentals of the Los Gatos area,” said Adam Levin, executive managing director of Levin Johnston. “Los Gatos’ proximity to Silicon Valley has played a major role in attracting tech-related companies such as Netflix, the town’s largest employer. In turn, this has helped Los Gatos to attract affluent and well-established residents that are interested in the city’s high quality of life and small-town appeal. The shopping center also provides the local community with a diverse mix of tenants that will meet their everyday shopping and dining needs.”
The asset was originally constructed between 1957 and 1960 and currently includes 20 suites. Tenants include major brands such as Nob Hill Foods, Chase Bank and Los Gatos Cafe. Pro forma rents per square foot per year are expected to reach $51.15 per square foot for a total of $2.061 million.
When it comes to shopping centers, El Gato Village is well-located near major employers and vibrant demographics. The town’s largest employer is Netflix, who employs more than 1,000 locals. The community is one of the wealthiest in the nation, according to the offering memorandum, ranking 33rd in the country in 2011. By 2017, the average estimated household income in Los Gatos was $206,644. In 2019, the median household income had reached $155,863. With such demographics, the investment of the asset is a stable and “attractive” investment for companies such as the Prado Group moving forward.