Investec Buys 99,000-SF Center for $21M

SAN DIEGO-Santa Barbara-based investment firm Investec has acquired the 99,304-square-foot, 100% occupied Plaza at Sunbow shopping center from Phoenix-based Levine Investments for $21.15 million in an all-cash, off-market transaction. Mark Lucescu of Newport Beach-based Lucescu Realty represented the seller, with Investec representing itself.

The shopping center, at the northeast corner of East Palomar Street and Medical Center Drive, is anchored by Ralphs and CVS/pharmacy, along with a host of national retailers including Starbucks, McDonald’s, KFC and T-Mobile. Grant Harris, Investec’s director of acquisitions, says that Sunbow has performed very well since it was built in 2002 and that the Santa Barbara-based firm is confident that the center will continue to thrive with the mix of tenants in place.

Sunbow was developed by Kitchell Development and has been the dominant neighborhood shopping center in its trade area. The center is situated on 11 acres at the northeast corner of Medical Center Drive and Palomar Street.

Kenneth Slaught, president of Investec, points out that despite the reports of gloom and doom in the retail sector, all of Investec’s existing grocery anchor tenants have shown sales increases averaging 2.9% over the past 12 months. “Much of the adverse retail press has been focused on discretionary retail or the woes affecting large niche chains,” Slaught observes. He says that with the grocery and drug stores typically accounting for approximately 60% of the rentable area of Investec’s centers, “We are confident that our gross sales increases will continue at all of our shopping centers.”

Traffic and sales are increasing at the company’s necessity-based shopping centers as consumers return to basics by eating at home more often and by searching discount retailers for bargains, according to Slaught. He says that Investec plans to continue buying the same type of properties in Coastal California, but during the next few years will have a “once-in-a-generation opportunity” to buy such properties at below replacement cost.

The addition of Sunbow brings Investec’s retail portfolio to nearly two million square feet valued at more than $620 million in California. In October the company completed the development of Gene Autry Plaza , a new $17.5 million 60,000-square-foot shopping center in Palm Springs that features the first ground-up Smart & Final Extra! store in California as well as a Staples and 11,500 square feet of shop space.