By Jon Peterson
A private owner has placed on the market for sale an existing multi-tenant retail property that is located at 19875 Stevens Creek Boulevard in Cupertino. The offering price on the asset is $16.5 million, or around $655 per square foot, according to the property’s offering document.
The listing agent on the sale is The Ida Group of Marcus & Millichap out of its San Francisco office. A person working on the transaction is Jeff Ida, first vice president.
Should the sales price be reached, the cap rate on the transaction would be 3.9 percent for 2022. This would be based on the property’s current net operating income. In addition, the 10-year blended cap rate is projected to be 5.42 percent.
The retail property has a total of 25,198 square feet. There are two tenants in the building that now occupy 100 percent of the space. One of these is CORT Furniture, a furniture rental business that has more than 100 locations nationwide. Its lease covers 66 percent of the space in the building and has a rental rate that is significantly below market. Its lease will expire at the beginning of June in 2026, however, the tenant does have one five-year option on its space.
The other tenant is the Kiddie Academy, which is a significant player in educational child care through youth educational programs. The lease with this tenant covers 33 percent of the property and will expire at the end of October 2026. It has two five-year lease options.
This property did perform well even during the pandemic. Both tenants have been paying their rent during the difficult economic times that many retail tenants have suffered since the outbreak of COVID-19 around the country. The two occupants have been in the property for 10 years. The asset was first developed in 1964, and it sits on 1.79 acres of land.
19875 Stevens Creek has a very strong location that at some point in the future could be ripe for a new development opportunity. The property is located right next door to the Valco Town Center development site with over 30 acres under development and plans for 2,402 residential units, 400,000 square feet of retail and entertainment and 1.8 million square feet of new office space. The retail asset is also less than a mile from Apple’s flagship spaceship campus.