Record Retail Sale in Campbell at $700 Per Square Foot

retail_1

A small, and almost unnoticeable retail sale in Campbell last week set a new per square foot record for a retail property in that city. Seasons Leisure, Inc., also known as Pool Patio & More sold its 5,750 square foot freestanding property at 1870 S. Bascom Avenue in Campbell for $4,025,000, or $700 per square foot. Mancini’s Sleepworld was the buyer and will be occupying the property shortly.

The Campbell market is on proverbial fire and doing really well. The Bascom Avenue location is roughly half way between Santa Clara’s Westfield Valley Fair mall and downtown Los Gatos, two very high quality retail locations. This specific building is also across the street from the Pruneyard, a 365,000 square foot office and 250,000 square foot retail center owned by San Francisco-based Ellis Partners, who is looking to revitalize the complex.

“This is one of the strongest retail markets in Santa Clara County,” said Mike Costa, senior vice president at commercial brokerage DTZ Retail – Terranomics, who along with Mark Dowling, a senior vice president at DTZ, represented the seller in the transaction.

The retail building is a two story, modern structure that was constructed in 2003. A five-mile radius around the location has a daytime population over 260,000 with an average household income over $107,000.

“Most of the market vacancy is untrackable,” said Costa. “Most of the firms track reports for spaces at or over 50,000 square feet, and the vacancy they track is at 2 or 3 percent.”

And when availability of a trophy asset like this one becomes apparent, interest in such locations is very high. “The good places, we’re pre-leasing them. [Tenants] know they are coming, and they get gobbled up as soon as they hit the market,” added Costa.

This sentiment was confirmed in DTZ’s first quarter 2015 Bay Area retail summary. In it, the firm reported that retailer demand remained extremely robust and newer, high-quality product is what they want. At the time, the regional vacancy rate for shopping center space, which is somewhat different than this location, but of similar quality, was at 5.1 percent. While the firm tracked nearly 800,000 square feet of space under construction and another 1.1 million square feet in the pipeline, most of that had already been pre-leased.

Image courtesy of San Jose Construction

West Coast Commercial Real Estate News