written by
Emily Bane

The Commercial Building Sold for $860K

Intersection Senior Director, Kyle Clark represented the seller in the sale of the Valley Furniture building in El Cajon for $860K. The sellers are the owners of both Valley Furniture and Cash & Carry Furniture, the latter being adjacent to the property.

The 10,810 square-foot retail commercial building is located at 906 E. Main Street, El Cajon, CA 92021. The property is situated on a visible and prominent business intersection of Main Street and Mollison Avenue, offering excellent signage exposure. Located just East of the Downtown El Cajon Management District with numerous other retailers and restaurants nearby. 

The sellers’ decision for the sale of the 906 E. Main Street building came to fruition upon combining their two furniture stores into the other, much larger property. The building was vacant at the time of the sale. 

While the retail commercial building presents an attractive property and location, the sale remained difficult due to no on-site parking available or designated space for dumpsters. This is because the building occupies the parcel in its entirety. In order to facilitate the sale, the sellers agreed to allow the buyer to utilize a portion of their adjacent property to accommodate two trash dumpsters.

The new owner plans to remodel the retail storefront and open an appliance retail outlet.

Emily Bane is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. Contact Emily at 619-819-8725 or [email protected]

written by
Emily Bane

Intersection Completes 1031 Exchange to Reduce Clients Stress and Increase Cash Flow

Intersection commercial real estate represented Elizabeth H. Riggs Trust in the 1031 exchange which resulted in the purchase of Barons Market for $4,650,000 at the Menifee Lakes Plaza in Menifee, Calif. Intersection Senior Director, Kyle Clark, represented the buyer, CBRE’s Newport Beach office represented the seller Menifee Lakes Plaza, LLC.

The 17,854 square-foot retail space is located at 29787 Antelope Road, Menifee, CA 92584. The building is one of 13 that comprise the new, 138,000 square-foot Menifee Lakes Plaza, located at the intersection of Newport Road and Interstate 215.

The property served to complete the 1031 exchange for the buyer, who was selling their apartment building for a less management-intensive asset to provide stable cash flow and preserve her monthly income in the years to follow. 

Clark was approached by the buyer’s son to identify a single-tenant property under a long term NNN lease while avoiding high risk tenant types such as restaurant chains or traditional retailers. After searching nationwide for suitable properties, tying up two other prospects that failed during the due diligence review, Clark identified the Barons Market property.

“It was close to home, yet provided an attractive cap rate and return similar to other out of state alternatives,” said Clark. “Since closing on the low maintenance property, our client is thrilled with her increased cash flow without all the management headaches.”

Emily Bane is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. Contact Emily at 619-819-8725 or [email protected]

written by
Emily Bane

Property’s Thoughtful Design Makes it a Lifestyle Destination

SAN DIEGO, Calif. – The San Diego Business Journal honored commercial real estate management and investment advisory firm Intersection with the annual Best Retail Project of the Year Award Feb. 26 during a ceremony at Bali Hai Restaurant on Shelter Island.  The presentation was made during the Journal’s Commercial Real Estate Awards recognizing Intersection’s efforts in creating a destination retail site at Old Poway Village in Poway, Calif.

“We are very excited about earning the award,” said Intersection Managing Director Mark Hoekstra, who grew up in Poway across from the property.  “This is a very unique project.  We knew that we could create an experiential retail center unlike anything Poway has ever seen.  Our tenants are local and provide the community with an internet-resistant environment.  We made Old Poway Village fun.  A place where people want to be, where they can have a good experience and enjoy the Old Poway Village environment with the entire community.”

The 35,191 square foot retail center boasts an enticing and complimentary mix of businesses offering a variety of goods and services including food, wine, exercise, and a tap room with 20 rotating San Diego craft beers.  Hoekstra highlighted that all of the businesses are local to the Poway community, with some coming from Poway’s Saturday Farmers Market and opening a brick-and-mortar location for the very first time.

While some of the businesses might be new to working out of a commercial retail space, many are already settling in and making a name for themselves like Smokin’ J’s BBQ, which was featured in the San Diego Eater and Pacific Magazine.

Other businesses at Old Poway Village, which is now fully leased, include The Hop Stop, Mission Cellars, Poway Pilates, SD Music Academy, Poway Chamber of Commerce, Sam’s Old Poway Barber Shop, Filhart Beef, and FITT University, among others.

“By bringing a variety of artisan and specialty use businesses together, we created a sense of place that local residents and regional customers will embrace and seek out,” said Intersection Senior Director Dan McCarthy, who’s brokerage team marketed and leased the project.  “This increase in foot traffic helps all of the tenants and adds to the image of the center.”

McCarthy and his team put a lot of thoughtful work into orchestrating the right mix of businesses at Old Poway Village.  After purchasing the property for $6.9 million in May of 2017, Intersection canvassed visitors and residents across the community to identify what Poway was missing, in addition to meeting with the mayor’s office to get an idea for what the city saw as complimenting its future vision.

“Poway already has a lot to offer San Diegan’s and visitors who are looking to get outdoors,” said Poway Mayor Steven Vaus.  “Old Poway Village has evolved into a destination where people can come together to relax and have a good time.  It also fuels the city’s economy helping local Poway businesses thrive.  Old Poway Village is central to our vision to enrich our community and quality of life through an exceptional blend of recreation, arts, leisure, and cultural programs, in addition to providing parks, facilities and open space for all.”

Collaborating with the community was very important according to Hoekstra.  That collaboration led to Intersection investing approximately $1.2 million to add 6,000 rentable square feet to the property and enhancing features that would make it attractive to customers.    

Hoekstra said, “We really tried to create this destination in the community that is tied into activities that are happening in Poway.”

Old Poway Village is adjacent to the Poway-Midland Railroad, Veterans Park, and Old Poway Park where an average of 70 weddings are hosted each year.

“I think that when visions align, good things happen,” said McCarthy, who is a resident of Poway.  “The city had a desire and we had a vision with a plan.  Combined we were able to make good things happen.”

Emily Bane is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. Contact Emily at 619-819-8725 or [email protected]

written by
Emily Bane

Real estate veteran brings more than 45 years of experience to Intersection’s brokerage division, providing expertise from San Diego to Orange County to enhance the services of the expanding commercial real estate company.

SAN DIEGO — Intersection, the downtown San Diego commercial real estate (CRE) firm specializing in brokerage, investment management, and real estate services names Jay Arnett as its latest Senior Director. Arnett spent the last 45 years building his relationships and portfolio at CRE firms in San Diego and Orange counties. Beginning his career in the industrial and office sectors, he grew his practice as a generalist, completing transactions from Oceanside to Chula Vista.

Arnett joins Intersection’s rapidly growing brokerage division, specializing in commercial brokerage tenant representation and investment sales. His extensive market knowledge enables him to identify sound sales and leasing opportunities that are both value-enhancing and strategic investments. As an active member of the Society of Industrial and Office Realtors (SIOR), Arnett is certified with the prestigious SIOR Designation representing the highest level of knowledge and ethics in the industry.

“Jay’s highly personalized service and informed strategic expertise will be invaluable as we continue to grow our brokerage division,” said Mark Hoekstra, Managing Director at Intersection. “As one of the most highly respected brokers in San Diego, his experience, leadership and integrity adds to the depth of the Intersection team.”

Over his 45-year career span, Arnett has completed in excess of 15 million square feet in office, industrial, and flex space transactions, resulting in over $1.5 billion in market value.

Arnett attributes his success to listening to clients and building tailored solutions that fit their needs. “The flexibility of a nimble, San Diego-owned company means that clients will benefit from local perspective and expertise that results in a more personalized experience overall,” said Arnett.

“I’m thrilled with the opportunity to have my brokerage career back in downtown at Intersection. There is immense opportunity at the company to expand both in San Diego, as well as into other submarkets,” Arnett said. “I’m looking forward to helping grow the brokerage division and assume a possible management position down the line.”

Emily Bane is the Marketing Coordinator at Intersection, providing strategic marketing expertise to support business objectives across company divisions. Contact Emily at 619-819-8725 or [email protected]

written by
Rob Kerr
Sale-Leaseback Overview

In commercial real estate sale-leaseback transactions, a property owner sells real estate used in their business to an unrelated private/institutional investor or other third party.  At the time of the sale, the property is leased back to the seller for a mutually agreed upon time period. It is generally structured as a 10 to 30-year triple net lease and often includes renewal options.  If executed successfully, a sale-leaseback will be mutually beneficial to both the seller/lessee and buyer/lessor.  All parties must give careful consideration to the business, tax advantages and disadvantages associated with this type of arrangement.

 
Seller Advantages
  • Improves bottom line —company can focus on their core operational business resulting in potential increased returns, productivity and efficiencies.
  • Seller receives 100% of property value (subject to possible capital gains tax) versus conventional financing or re-financing options with likely more favorable terms and without the associated fees and possible covenants.
  • Reallocation of capital/reinvestment of sale proceeds.
    • Funds available for dividends, re-purchase of stock, debt payments or financing of mergers and acquisitions.
    • Conversion of non-earning assets into investment capital provides flexibility and often results in potential higher return on capital/profitability.
  • Improves balance sheet and credit standing – eliminates asset book value and liability and replaces with cash resulting in improved financial ratios.
  • Position the company to take advantage of beneficial tax treatments.
    • Lease payments versus depreciation/interest deductions which may have inherent limitations, especially over time.
    • Timing of gain and loss recognition including the ability to offset expiring net operating losses.
  • Typically, a higher sales price is achieved in this type of transaction unlocking the property’s appreciated value while owner/user maintains occupancy.
  • Can act as a deterrent to corporate takeovers.
 
Seller Disadvantages
  • Loss of residual property value.
  • Possible relocation at the end of the lease term.
  • Potential for some loss of flexibility.
  • High rental payments if market softens.
 
Final Thoughts

Sale-leaseback may be an excellent way for a company to continue uninterrupted use of the property while retaining certain control over the real estate that is important to its operations for the foreseeable future. It also enables the company to free up debt and equity capital to achieve some of the various advantages listed above. Generally, the possible seller advantages outweigh the potential disadvantages. While there are certain marketing and legal restraints, with the right advisers the transaction can be carried out, the value is maximized, and the company’s operational interest are adequately protected during the term of the lease.

Rob Kerr is a Senior Director at Intersection, offering expertise in both property acquisition and disposition as well as investment sales, including NNN, retail, industrial, and multi-family. Contact Rob at 619-369-2400 or [email protected]

written by
Emily Bane
$788K TRANSACTION REPRESENTS ONE OF THE LARGEST OFFICE LEASE DEALS IN EAST COUNTY THIS YEAR

20-year-old local business, Center for Positive Change, signs 5-year lease relocating to a larger location

Center for Positive Change (CFPC) has signed a five-year lease to occupy an approximate 11,632 square foot office building at 7474 El Cajon Boulevard in La Mesa for $787,968. Term commencement for this lease is August 1, 2019 and will enable CFPC to expand into a larger and more accessible location to better serve their clients. Senior Directors of Intersection, Kyle Clark and Dan McCarthy, represented both the lessor and lessee in the transaction.

This new lease represents an important component to improvements along the long-neglected stretch of El Cajon Blvd., between La Mesa Blvd. and 70th Street.

This single-tenant property is one of the few spaces of this size currently available in the office market and the transaction represents one of the larger office lease deals in East County this year. Kyle Clark of Intersection noted, “This new lease represents an important component to improvements along the long-neglected stretch of El Cajon Blvd., between La Mesa Blvd. and 70th Street. With new restaurants opening and multiple multi-family residential projects either planned or currently underway within just a few blocks of the site, the location promises a good home for the lessee.”

The owner of the property plans to invest in a remodel of the exterior structure, landscaping and parking areas.

Center for Positive Changes (CFPC) is a non-profit agency founded in 1999 dedicated to providing effective, quality treatment within their practice, to their clients, who include both the children in residential therapy at CFPC and their families. For more information, visit Center for Positive Changes website.

Emily Bane is the Marketing Coordinator at Intersection, providing support to Brokerage and Investment teams through digital marketing and social media strategy. Contact Emily at 619-819-8725 or [email protected]

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