By Jon Peterson
A private ownership group has placed on the market for sale a fully occupied retail property in Santa Rosa that totals 37,905 square feet located at 2705 Santa Rosa Avenue. The asking price on the asset is $19 million, or roughly $500 per square foot, according to the property’s offering document.
The current owner of the property has chosen to sell the property through the assistance of SRS Investment Properties Group. One person involved in the transaction will be Matthew Mousari, a managing principal with the firm. He works out of the company’s office in Newport Beach. The listing agent did not respond to phone calls or emails for this story.
Should the sales price be reached, the transaction would produce a 5.11 percent cap rate in the first year, according to the property’s offering document. This return is based on the property’s net operating income of $970,411.
The retail asset has recently been remodeled and two brand new tenants have been brought into the space. One of the tenants is Total Wine, a large independent retailer of fine wine. Its space totals 22,305 square feet. This location for the tenant is projected to open in November of this year, and the lease has been signed for an initial period of 10 years with three five-year renewal options. There is a 10 percent rental increase in the sixth year of the lease and at the beginning of every subsequent renewal option.
The other tenant in the property is Planet Fitness, which will have an operation totaling 15,610 square feet. This space is projected to be open for business in October of 2022. This company’s lease is for 15 years with three five-year renewal options. There is a 10 percent rental increase every five years for the initial term and for the option periods. The leases for both tenants are considered to be triple-net leases.
The property up for sale is on a 3.24-acre lot. Included in the sale will be surface parking that can accommodate 210 parking spaces.
The property is located in an area with a very strong retail presence. Some examples of this would be one of the top 10 performing stores in the Costco chain and other tenants like Target and Trader Joe’s. The asset has a five-mile trade area that is supported by 197,000 residents. The area has an average housing income of $97,079, according to the property’s offering document.
