By Jon Peterson
San Francisco-based PCCP and Cupertino-based Hunter Properties have formed a joint venture to acquire the leasehold interests in fully occupied retail buildings on El Camino Real in Sunnyvale for $6 million, according to public documents; the deal closed on February 2nd, 2016. Both parties declined to comment on what the total investment was in the transaction.
The main equity investment in the property was made by PCCP. Hunter did invest some equity and is responsible for the main day-to-day duties on the asset.
[contextly_sidebar id=”qC9WseTRol92ROxLFKddw0xzevvg0HWE”]PCCP first became aware of the property by hearing from the broker representing the seller. “We had a previous relationship with the broker representing the seller, and they were the ones that initially got us interested in the property. Once we found out about it, we brought Hunter Properties into the transaction,” says Brendan Shanahan, an associate with PCCP. The listing agent for the seller was Sacramento-based Juno Commercial Real Estate. It did not respond to several phone calls seeking comment for this story. The sellers of the retail were several individual entities.Hunter Properties sees the location of the buildings being very strong. “This is what we believe to be a Main and Main location. We view the retail makeup with very strong tenants who are signed to long-term leases and should produce solid income for a while,” says Deke Hunter, president of Hunter Properties.
The retail buildings are located at a busy intersection along El Camino Real. The Ross store is located at 119 East El Camino Real, Office Depot at 121 East El Camino Real and The Sports Authority at 125 East El Camino Real. Other tenants in the property include a Sprouts grocery store and Payless Shoes. “We view what we invested in to be a smaller power shopping center that also includes a grocery store,” said Hunter.
The property has very strong demographics. Within a five-mile radius of the property is a population of more than 470,000 [people], and average incomes are well over $100,000. “I think that these numbers are very strong. We believe that even if one of our existing tenants would decide to leave, we wouldn’t have too much trouble leasing the space to another tenant with a very strong location and demographics,” said Shanahan.
The ground leases of the fully occupied buildings that were acquired total 98,000 square feet on 10 acres. The transaction also included fee simple interest on two additional acres of land. The parcel underneath the ground lease is owned by the Roman Catholic Diocese of San Jose.
The project is not the first investment that PCCP and Hunter Properties have done together. They also worked together on the 300,000 square foot Village Oaks Shopping Center in San Jose.
