By Jon Peterson
Dallas-based Dunhill Partners has placed on the market for sale The Majors at Nut Tree retail property in Vacaville located at 1621-1679 East Monte Vista Avenue. The offering price on the sale of the property is $69.1 million, according to the property’s offering document.
The seller has selected CBRE’s National Retail Partners-West unit to be the listing agent on the property’s marketing efforts. The three people working on the sale for the company are Phillip Voorhees, Jimmy Slusher and James Tyrrell. Both the current owner and CBRE did not respond when contacted for this story.
This asset will represent one of a limited number of retail assets in the greater San Francisco Bay Area that is up for sale, according to industry sources. A factor in this limited activity has been decreased interest in retail properties from investors as a result of the COVID-19 pandemic and the rapidly shifting trends in the retail market.
The portion of the property that is on the market includes the major anchors in the asset, which totals roughly 241,000 square feet. This part of the shopping center is now 96 percent leased. The anchor tenants that are in this part of the retail center include Best Buy, PetSmart, Nordstrom Rack, Five Below, BevMo!, Home Goods, Old Navy and ULTA.
Should the asking price be reached on the sale ,it would come in at $286 per square foot. This would come in well below the property’s land-inclusive replacement cost, which is estimated to exceed $400 per square foot, according to the offering document. At a sales price of $69.1 million, the first-year cap rate is projected at 7 percent with an anticipated increase up to 7.38 percent in three years following that. This would be driven by a parallel increase in net operating income in the property, which would go from $4.8 million to $5.2 million.
The tenants that are part of the sale include leases that have some length to them. Best Buy is the largest tenant in the asset up for sale. This retailer has a lease for 30,038 square feet that runs until January 2027. Nordstrom Rack occupies 27,804 square feet in the property. Its lease expires in October 2027. The major retailer with the longest lease is Five Below. It has a lease that runs out in December 2031 on 13,816 square feet.
The entire Nut Tree property totals 370,114 square feet. It was constructed between 2006 and 2008. The total lot size of the property is 20.31 acres. The asset also features a total of 1,454 parking spaces available to customers in the retail center.
The retail asset has a five mile trade area. Within this range of the property, there are approximately 110,000 residents with an average household income exceeding $113,200, according to the property’s offering document. Over 35,000 daytime employees are located within a three-mile radius of the property.
The Majors at Nut Tree is part of the 71-acre Nut Tree Master Plan. This has a variety of real estate types including retail, office/distribution, residential, amusement park, the Harbison House Museum and event center. The newest addition to the larger planned community will be the 216-unit Nut Tree Apartments that is currently under construction and is projected to be completed in 2023.