By Jon Peterson
Cupertino Investment Parts LLC has put on the market for sale a 25,198 square foot retail property in Cupertino located at 19875 Stevens Creek Boulevard. The asking price on the asset is $16.5 million, or roughly $655 per square foot, according to the property’s offering document.
The sellers have held title to the property since 2012, and they appointed the listing to the Ida Group of Marcus & Millichap. Those working on the sale include Jeffrey Ida, first vice president, and Brendan Gallagher, associate. They both work out of the firm’s San Francisco office.
If the property would trade at the offering price, the 2022 cap rate would be 3.9 percent, as written in the asset’s offering document. The 10-year blended cap rate would be 5.42 percent.
The property presently has no vacancies, and it is occupied by two tenants. The larger of the two is CORT Furniture, a commercial furniture provider that has a lease covering 66 percent of the space or 16,608 square feet. The lease does not expire until June 2026. This company is a subsidiary of Warren Buffets Berkshire Hathaway and it has more than 100 locations nationwide servicing over 80 countries for furniture rental.
The other tenant in the property is the Kiddie Academy, a leader in educational child care that has been operating for over 40 years in the service of youth educational programs. Its lease represents roughly a third of the property, which comes to 8,590 square feet. Its current lease was started in January 2011, and it does not expire until the end of October 2026. Overall, roughly 60 percent of the property is significantly below market rent so there is a mark-to-market opportunity in the future for the new owners, as well.
The projection is that the property would likely attract interest from a 1031-exchange buyer, according to sources that are familiar with the property. Both of the tenants in the property have been in the asset for 10 years, which shows strong occupancy history and commitment to the space. Investors who are looking for strong current income on the property would see this as a major benefit for the location.
The property also provides some long-term redevelopment potential based on its location. The retail asset is approximately one mile from Apple’s flagship Spaceship campus and is right next door to the Vallco Town Center development site. This project is planning to deliver 2,402 residential units, 400,000 square feet of retail and entertainment and 1.8 million square feet of office space.
