Hanley Investment Group has brokered the sale of a single-tenant property occupied by Bank of America in Palm Desert, California.
The sale price of US $2,875,000 for the absolute triple-net ground lease sets a record cap rate in 2023 for a site used solely by the bank.
Hanley Executive Vice Presidents Bill Asher and Jeff Lefko represented the seller, a private investor based in Los Angeles.
The buyer, a private investor based in Riverside County, California, was represented by Tyler Rollema at The Klabin Company in Torrance, California.
Asher says: “We generated multiple, qualified offers within initial weeks of launching formal marketing of the property, ultimately finalizing a deal with an all-cash buyer in a 1031 exchange, residing in close proximity to the property.
“Based on the competitive bidding environment we created, we negotiated a timely due-diligence period that commenced from the signed letter of intent to help provide the seller with a higher level of certainty of the buyer's commitment to purchase the property.
"We closed escrow at over 97 per cent of the asking price."
The 3,515-square-foot, freestanding Bank of America branch occupies a 0.70 acres and has a drive-thru.
The property is located at 39355 Washington Street, at the hard-corner signalized intersection of Washington Street and Market Place and benefits from excellent exposure and visibility on Washington Street, one of the major north/south corridors in the Coachella Valley (46,350 cars per day).
The building is also strategically located across the street from Sun City Palm Desert, a 1,600-acre gated community featuring 5,000 homes and 9,000+ residents and is ideally positioned one block from the Interstate 10 (107,750 cars per day) entrance/exit for Washington Boulevard.
Interstate 10 is a primary east/west arterial connecting Los Angeles to San Bernardino County, Riverside County, and Phoenix, Arizona.
We generated multiple, qualified offers within initial weeks of launching formal marketing of the property
Retailers in the area include Stater Bros., EOS Fitness, Rite Aid, DaVita Dialysis, Del Taco, McDonald’s, Starbucks, Taco Bell, and Walgreens.
Palm Desert is the geographic center of the Coachella Valley, a fast-growing region of Southern California, and is one of the most affluent areas in Riverside County, with an average household income of over US $110,000 within a three-mile radius of the property.
The property is adjacent to the planned Mirasera mixed-use development, which is expected to consist of up to 1,756 residential units, a 200-room hotel, 187,300 square feet of retail, and 228,700 square feet of business park space.
Between 2000 and 2021, the area experienced a 65 per cent increase in population within a three-mile radius.
The Coachella Valley is home to four casinos and over 130 golf courses.
Coachella Valley is also known for its events: the Coachella Valley Music and Arts Festival, the largest music festival in the world, with over 250,000 attendees; Stagecoach, the second largest music festival in the world, attracting over 85,000 attendees; and Riverside County Fair and National Date Festival, with over 315,000 attendees.
“Demand for long-term corporate net-leased investments with strong real estate fundamentals has continued to remain steady this year despite the current economic climate,” says Asher. “These types of assets are still selling at a premium due to the lack of quality assets in today’s market.”
