By Jon Peterson
El Segundo-based Paragon Commercial Group has taken its acquisition efforts into the San Francisco Bay Area for the first time with $51 million acquisition of the 128,000 square foot Target store located at 20745 Stevens Creek Boulevard in Cupertino. The purchase price was according to sources familiar with the transaction.
“This is a property that we feel very good about and will take on a long-term view from an ownership standpoint. It’s good real estate whether it’s leased to Target or to some other kind of retail. Target doesn’t lease a great deal of its stores. I think in its last report, Target had stated that somewhere between 75 percent to 80 percent of its stores are owned by Target,” says Jim Dillavou, a principal with Paragon.
The asset was acquired from a private seller. According to data from the San Jose office of SRS Real Estate Partners, within the three-mile trade radius of the property there are over 192,000 people, as stated in the 2015 census projections. The medium household income varies from $128,719 within one mile of the location and slides to $124,385 three miles out.
Paragon is planning to be a much bigger player in Northern California going forward. “Our goal is to open a regional office in the [Bay Area] before the end of the year. The company has not made a final decision as to where this office will be located. We will be hiring an acquisition person to work out of the regional office, which will allow us to grow our operation in the marketplace,” said Dillavou.
Paragon will be actively looking at assets throughout the Bay Area. The company wants to invest in retail properties that have a value-add component, which would mostly involve necessity/grocery-anchored shopping centers. This strategy could allow for the acquisition of existing properties and pursuing ground-up development opportunities.
Paragon made the acquisition in Cupertino for a family office capital source. The company also buys properties for the Canyon Catalyst Fund, which is an entity funded by the California Public Employees Retirement System, however this purchase was not for that fund.