(EDITOR’S NOTE: According to public records, the property sold for $28 million, or just over $234 per square foot. The seller was an entity associated with Palo Alto-based Cypress Properties.)
San Francisco, CA (October 7, 2020) — Newmark Knight Frank (“NKF”) has announced the sale of Gateway Plaza, a 119,407-square-foot neighborhood shopping center located in Santa Cruz, CA.
NKF’s Vice Chairman and Head of Retail Capital Markets Northern California Nicholas Bicardo, Vice Chairman Edmund Najera and Associate Director John McKenna represented the private seller in the transaction. An affiliate of Balboa Retail Partners purchased the property.
“Sold for the first time since being developed in 1998, Gateway Plaza is one of just a few retail assets in Santa Cruz, thereby making the barriers to entry extremely high.” said Bicardo, “This makes it exceedingly difficult to acquire scale in this market, while at the same time making it equally difficult for retailers to find any availability. Gateway Plaza is the perfect example of quality real estate with strong long-term value appreciation.”
Gateway Plaza is home to several nationally recognized tenants such as Ross, Office Max, Cost Plus and PetSmart. The property features strong visibility as it sits along River Street and is adjacent to the entrance of Highway 1. It also serves a wide customer base as it is strategically located near multiple residential neighborhoods and the UC Santa Cruz main campus. At the time of sale, the property was 98 percent leased to a strong lineup of daily needs and restaurant tenants.
The City of Santa Cruz maintains high physical barriers to entry with mountains to the north and east and the Pacific Ocean to the west. This limited developable area helps to create tight market fundamentals including a 1.5 percent vacancy rate and only two, 18,000- to 30,000-square-foot box availabilities within a 20-mile radius, according to NKF Research.
About Balboa Retail Partners
Balboa Retail Partners is a real estate investment company dedicated to pursuing retail opportunities nationwide. Since formation in 2011, the company has acquired over 4 million square feet of retail assets covering 18 states. The founders of Balboa Retail Partners have worked together for over 16 years on investments totaling 98 million square feet.
About Newmark Knight Frank
Newmark Knight Frank (“NKF”), operated by Newmark Group, Inc. (“Newmark Group”) (NASDAQ: NMRK), is one of the world’s leading and most trusted commercial real estate advisory firms, offering a complete suite of services and products for both owners and occupiers. Together with London-based partner Knight Frank and independently-owned offices, NKF’s 18,800 professionals operate from approximately 500 offices on six continents. NKF’s investor/owner services and products include investment sales, agency leasing, property management, valuation and advisory, diligence, underwriting, government-sponsored enterprise lending, loan servicing, debt and structured finance and loan sales. Occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate services consulting, project management, lease administration and facilities management.