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Texas investor seeks premium on sale of Antelope Valley retail

58K sf property leased to Smart & Final through 2035

Spirit Realty's Jackson Hsieh with 5038 West Avenue North (Real Share Net Lease, Loopnet)
Spirit Realty's Jackson Hsieh with 5038 West Avenue North (Real Share Net Lease, Loopnet)

The exodus from California to Texas includes a Dallas-based investor looking to sell a retail property in the Antelope Valley of northern L.A. County at a premium.

Spirit Realty listed the 58,000-square-foot property at 5038 West Avenue North for $25.6 million, or about $441 per square foot, according to online listings from Marcus & Millichap.

Public records show Spirit Realty has owned the property since March 2015, when it bought the property for $13.6 million from grocery chain Albertsons. Spirit landed Smart & Final, a Commerce-based grocery store, as a tenant the same year.

Smart & Final holds a triple-net lease on the property through at least 2035, according to Marcus & Millichap, a type of agreement where the tenant pays expenses of the property, including property taxes and maintenance costs.

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The grocery store also has options to renew its lease for a further 20 years.

Under the lease agreement, Spirit Realty charges $1.2 million in annual rent — about $20.94 per square foot a year — with annual increases of 2 percent.

If the deal goes through at $441 per square foot, it would be significantly higher than recent deals across various suburban markets in Southern California, most likely due to the length of the lease.

This month, Santa Ana-based Red Mountain Retail Group paid $42.3 million for a 168,000-square-foot shopping center in Chino — about $252 a foot. That shopping center was 92 percent occupied at the time of sale, anchored by Albertsons, Rite Aid and PetSmart.

In Santa Clarita, about 40 miles from Palmdale, a 210,000-square-foot shopping center recently traded for $54 million, or about $256 per square foot.

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