SRS Real Estate Partners Closes $13.5M Retail Sale in Palmdale, CA, Completing $32M Portfolio Breakup

SRS Real Estate Partners has completed the $13.5 million sale of a two-tenant retail property in Palmdale, California, closing out a six-property, $32 million portfolio breakup strategy executed on behalf of a national family office over the past three years.

The transaction involved a 58,652-square-foot property located at 39112 to 39228 10th Street West, occupied by Smart & Final and Barnes & Noble under triple-net, corporate-guaranteed leases with approximately 10 years remaining on each. The buyer was a Southern California-based private investor.

Deal Details: 10th Street West Retail Transaction

The property, built in 1999 and situated on 4.1 acres, is part of Palmdale Marketplace, a 214,000-square-foot power center with tenants including Target, Lowe's Home Improvement, and Sprouts. The site sits at the intersection of 10th Street and Technology Drive and is near the on/off ramp of State Highway 138 and 14.

SRS Capital Markets Senior Managing Principals Matthew Mousavi and Patrick Luther represented the seller, a family office that operates retail centers across the country. The six-property portfolio averaged a 5.57% cap rate across all sales.

"This asset is the final sale in a six-property, $32 million break-up strategy within Palmdale Marketplace that we have executed on behalf of the ownership over the past three years," said Mousavi. "We have successfully created significant additional value for our client by breaking up the asset and selling to private investors at more favorable price points than if we were to transact with a single buyer, ultimately maximizing returns for the seller."

"This final sale involved the two-tenant portion of the property that included Barnes & Noble and Smart & Final. Due to the offering being grocery anchored under newly extended leases, we received multiple offers from private and institutional profiles, ultimately selecting a local high net worth investor," added Luther.

Portfolio Breakup Strategy

The Palmdale Marketplace disposition represents a piecemeal sales strategy in which the seller, advised by SRS Real Estate Partners, divided a larger retail portfolio into individual assets sold separately to private investors rather than transacting with a single buyer. Previously sold properties within Palmdale Marketplace included Shops at Marketplace, Vitamin Shoppe, 5 Guys and Café Rio, Jamba Juice, and IHOP, along with other pad sites.

According to the firm, the grocery-anchored nature of the subject property — anchored by Smart & Final — along with the long-term, triple-net lease structure, drew multiple offers from both private and institutional buyers.

SRS Real Estate Partners

Founded in 1986, SRS Real Estate Partners is headquartered in Dallas and operates 30 offices nationwide. The firm provides commercial real estate services across retail, industrial, and capital markets. In the prior year, SRS Capital Markets completed more than $3.5 billion in deal volume across 950 transactions nationally. The firm currently has more than 845 properties actively listed with a combined market value exceeding $3.7 billion.