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Marcus & Millichap Brokers the $6.4M Sale of Dollar General Portfolio in California

April 27, 2022

SAN BERNARDINO, Calif., April 27, 2022 – Marcus & Millichap (NYSE: MMI), a leading commercial real estate brokerage firm specializing in investment sales, financing, research and advisory services, announced today the sale of two Dollar Generals in the San Bernardino MSA of California. The combined portfolio sold for $6,493,000.

“The sale of these Dollar General properties may have shattered the cap rate record for dollar store investments in Southern California that have less than 10 years remaining on the lease. Through our marketing efforts, we generated eight offers and closed both at 100% of the list price at their respective cap rates,” said Jaime Salazar, investment associate. “The seller of this two-property portfolio initially purchased the deals in 2016 at a blended cap rate of around 6.5%. The properties recently transacted at a new blended cap rate of 5.55% despite having less lease term remaining and the properties being in a rural location in the upper desert of San Bernardino. This deal is an example of the competitive nature of the current market and our ability to move capital across state lines.”

“It is a very unique time in the market where our clients can transition out of properties they recently purchased, at much higher prices, due to cap rate compression across the board,” added Daniel Hurd, first vice president investments. “Demand for single-tenant net leased retail has reached unprecedented levels. In recent years, dollar stores have taken the spotlight with a captive audience of investors looking for long-term, secure yield. I expect this trend to continue through 2022 as investors begin to shift their focus to rising interest rates.”

Jaime Salazar and Daniel Hurd, in the Marcus & Millichap Tampa office, had the exclusive listing to market the property on behalf of the seller, Masagana Properties, LLC. Garrett Fierstein, vice president with the Marcus & Millichap Capital Corporation, arranged the financing.

Built in 2015, the Dollar General, located at 1059 Old Woman Springs Road in Yucca Valley, is a 9,100-square-foot building strategically located in the Inland Empire of California, which is adjacent to Los Angeles. The property sold for $3,053,000.

The 2nd 9,100-square-foot Dollar General is located at 32510 CA-18 in Lucerne Valley, California, and sold for $3,440,000. The property is strategically located on a two-highway high traffic intersection from Interstate 15 (I-15) in Victorville and Interstate 40 (I-40) in Barstow. The buyer of the property was represented by Hurd and Salazar. Mr. Fierstein secured the following financing terms for the buyer: 65% LTV, a 10-year fixed rate at 3.63%, 30-year amortization, and no prepayment penalty.

 

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About Marcus & Millichap (NYSE: MMI)

Marcus & Millichap, Inc. is a leading brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services with offices throughout the United States and Canada. As of December 31, 2021, the company had 1,994 investment sales and financing professionals in 82 offices who provide investment brokerage and financing services to sellers and buyers of commercial real estate. The company also offers market research, consulting and advisory services to clients. Marcus & Millichap closed 13,255 transactions in 2021, with a sales volume of approximately $84.4 billion. For additional information, please visit www.MarcusMillichap.com.

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