Older Shopping Center Adapts Major Investor-User
In a Prime Example of Adaptive Reuse, Colliers Negotiates $9.6 Million Sale
Colliers International has negotiated the $9.6 million sale of a half-vacant neighborhood shopping center in Cerritos, California to an investor-user who plans to occupy a major portion of the multi-tenant complex in what brokerage officials are calling a prime example of adaptive reuse, a land-use trend growing in popularity among owners of older shopping centers, officials reported.
Located on 3.83-acres at 17500-17510 Carmenita Road near the heavily trafficked intersection with Artesia Boulevard, the 43,568-square-foot neighborhood shopping center was built in 1979. It counts among its major tenants Dollar Tree and Wilshire State Bank, but its largest space, a 27,000-square-foot former Rite-Aid Drug Store location, has been vacant for more than a year.
“That’s the space this investor-user plans to occupy for his furniture retailing business,” said Colliers Executive Vice President Christopher Maling, who along with Executive Vice President David Maling, represented the center’s owner. “While the space fits the expansion and higher-visibility needs of the furniture company and brings the center to full occupancy, it’s also an example of adaptive reuse, where space originally designed and built for one type of tenant is later occupied by a different type of user.”
Surrounded by several residential communities, the center was acquired by the furniture retailer during its search for a larger and more visible location to lease. However, when lease negotiations commenced, it became evident, according to Christopher Maling, that the retailer would be better served by purchasing the center.
“We were able to demonstrate to them that in this case, it made more sense to buy than to sign a long-term lease agreement,” said Christopher Maling. “The more we talked about it and demonstrated the upside of the center’s financials, the more interested and convinced the owner of the furniture company became. As a result, we were able to meet the needs of his furniture retailing business as well as his long-term investment goals. It was a very good opportunity to purchase an under-utilized center.”
While the Malings, who are based in Colliers’ downtown Los Angeles office, represented owner Five Points LLC, in the transaction, Brett OKeefe of RE/Max Commercial represented the investor-user.
“As neighborhood and community shopping centers undergo a sea change in the types of tenants occupying space, savvy investors are acquiring under-utilized and older centers like this one to meet changing consumer buying habits that have been forced upon them by the Internet and online shopping,” Christopher Maling added. “Although online retailing is still a relatively small segment of the overall consumer market, it has had a major influence on many centers. Still, though, there are just certain businesses, like furniture retailing, where consumers still want to touch and feel the merchandise, and that will never change.”