Starboard Plans Sale of Sacramento Shopping Center, Offering Price of $59MM

Starboard Realty Advisors, Florin Towne Centre, Sacramento, CBRE

By Jon Peterson

Irvine, Calif.-based Starboard Realty Advisors has placed on the market for sale the 210, 940 square foot Florin Towne Centre shopping center in Sacramento. The offering price for the property is $58,886,000, according to sources familiar with the sale of the property.

The seller has listed the property for sale with the CBRE through its National Retail Partners West operation in Newport Beach. The people working on the sale include Philip Voorhees, James Tyrrell and Megan Wood. The asking price on this portion of the center is $43 million.

Another portion of the property, which currently occupies 24 Hour Fitness and Smart Food Service is listed with Cushman & Wakefield for $11,152,000 and $4,492,000, respectively.

Starboard is a private real estate investment trust, and it has been the owner of the shopping center for two and a half years. The investment firm acquired the property for $34 million in August 2017, according to published reports.

The potential price point on the sale would come in at $205 per square foot, which would be well below the center’s replacement cost. The land-inclusive replacement cost for retail in the region is estimated to be $310 per square foot, according to industry sources that track this type of information.

The sale of the property, if it reaches the offering price, would produce a 6.6 percent cap rate. This yield would be based on the property’s first year net operating income of $2.85 million. The anticipation is that the NOI could be increased to $4 million over a three-year period and that the cap rate would be 8.74 percent.

Property-wide, the current rents in the shopping center are below market rate guidance numbers. The in-place leases now average to be just under 10 percent below current market rents.

Florin Towne Centre is located at 6001-6081 Florin Road and 7090 Stockton Boulevard in Sacramento. The property is now 74 percent occupied, and it is located to another retail center where the anchor tenant in the property is a high performing Walmart Supercenter. Tenants within Florin Towne Centre include 24-Hour Fitness, PetSmart and AutoZone.

The property has a five-mile active shopper radius. Within one mile of the asset, there is a population of 22,100 people with an average household income of $52,300. These figures grow to 387,800 population and an average household income of $74,200 for the five-mile radius.

West Coast Commercial Real Estate News