All-Cash Orange County Retail Transaction Closes in Just 35 Days
Colliers Negotiates $9.65 Million Sale of 24 Hour Fitness Site in Rancho Santa Margarita
Colliers International has negotiated the full-price $9.65 million sale of a single-tenant retail site long occupied by 24 Hour Fitness in the master-planned community of Rancho Santa Margarita in southern Orange County. The all-cash transaction closed with a cap rate of 5.5 percent.
Located at 22331 El Paseo at the entrance to the adjacent Plaza El Paseo shopping center, the single-tenant pad totals 74,000 square feet. The 24-Hour Fitness facility totals 22,000 square feet and includes a sub-tenant chiropractic service that has been available to both fitness club members and the public since 1997.
“This transaction is a perfect example of the continuing strength of the retail investment market in southern Orange County, especially for well-located, single-tenant properties like this one,” said Colliers Senior Vice President Mehran Foroughi, who along with Senior Vice President John Wadsworth represented the seller. “Not only did we receive multiple and very strong full-price offers, but we were able to achieve a very good cap rate while closing the transaction in just 35 days from the time we opened escrow.”
In addition to its location at the entrance to the shopping plaza, the site’s primary selling points included a recently renewed 10-year triple-net lease signed by 24 Hour Fitness to remain at the site it has occupied for the past 12 years and the national credit tenant retailers that anchor the nearby center. They include Kohl’s, BevMo! and Bed, Bath & Beyond.
“The fact that 24-Hour Fitness has been located at this same site since 1993, and has recently renewed its lease, was a key factor in our negotiations,” added Foroughi, who also represented the buyer in the transaction. “It also demonstrates the chain’s brand power and the impact a well-known national brand retailer can have on real estate investment decisions.”
Both buyer and seller were identified only as Orange County private investors, according to Foroughi, who is based in the brokerage firm’s Irvine offices.