By Jon Peterson
Excelsior, Minn.-based Oppidan has placed up for sale the long-term ground lease of the 44,611 square foot University Village Shopping Center in Albany located at 1075 Monroe Street. The asking price for the property is $26.5 million, or roughly $594 per square foot, according to the property’s offering document.
The ground lease on the property was first issued four years ago, and it now has 71 years remaining. The land is owned by the University of California Berkeley Board of Regents. The owners have chosen to award the listing on the sale to CBRE. Some of the people working on the transaction include Philip Voorhees, Kirk Brummer and James Tyrrell. CBRE did not respond to phone calls and emails when contacted for this story.
If the sale comes in at the asking price, the cap rate on the transaction would be five percent, which factors in the first year’s net operating income of $1.3 million. Due to embedded lease increases, the NOI on the property is projected to increase more than 23 percent, or by $301,200, over the anticipated holding period for the new owner.
University Village is a grocery-anchored shopping center. The anchor is Sprouts Farmers Market, which occupies 64 percent of the retail asset with a lease of 28,864 square feet. This tenant has a lease that does not expire until April of 2032. Part of the lease includes options for renewal, which could provide an even longer lease period for the new owner. 100 percent of the space in the property is leased to national or regional credit tenants, which include Pet Food Express, Carbon Health, Stretch Lab, Banfield Pet Hospital, The Habit Burger and Starbucks.
The property is a relatively newer property, which Oppidan developed in 2017. It is located in an area that is unlikely to see new retail development in the near to mid-term since there is more demand for residential development in the region. There is one new residential project that has been proposed that is located adjacent to the shopping center. This is the Albany Village Graduate Student Housing project, which will provide 760 single-occupancy bedrooms in 289 apartment-style units targeted to graduate students without children. The development would triple the existing supply of university-owned housing for single graduate students.
The trade area for University Village is considered to be in the range of five miles. The demographics in this area range from 28,800 people living within one mile with an average household income exceeding $152,200 to more than 322,600 people and an average household income of more than $138,200 for five miles.
The shopping center has two parcels that total 3.19 acres. The parcel facility at the property is 154 parking stalls, which equals to 3.5 spaces per 1,000 square feet.
Oppidan is a national property development firm with headquarters in Minnesota and offices in California and North Carolina, according to the company’s website. The firm has developed more than 566 projects valued at over $4.3 billion and spanning 26.4 million square feet throughout 40 states and parts of Canada.