Murrieta Smart & Final Staying Put After Building Sells For $8.5M

MURRIETA, CA — The Smart & Final Extra! store located at 25060 Madison Avenue in Murrieta is not going anywhere, although the retailer's building just sold for $8.5 million.

Hanley Investment Group Real Estate Advisors of Corona Del Mar announced Wednesday that it has completed the sale of the retail property. Hanley represented the buyer, a San Diego-based private partnership, while the buyer, Los Angeles-Anza Drive Properties LLC, was represented by Stevenson Real Estate Services in Glendale.

Smart & Final will continue to lease the building and pay property taxes. Terms of the lease agreement were not disclosed. In a released statement, however, Bill Asher, vice president of Hanley Investment Group Real Estate Advisors, described the lease as long-term.

"Smart & Final has an 18-year operating history at this location," Asher said. "There are approximately 12 years remaining [on the lease] with multiple options to renew."

According to Asher, the property was a low-risk deal for the buyer and the listing generated a lot of interest.

"We generated 10 competitive and qualified offers in the first two weeks of marketing, showing the unprecedented demand for essential 'daily needs' single-tenant grocery investments," Asher said. "We secured an all-cash 1031 exchange buyer based in Southern California and negotiated a short due diligence period and year-end closing to achieve the seller’s objectives. We closed at 99 percent of the asking price and achieved a record-low cap rate for a single-tenant Smart & Final nationwide."

The 20,750 square-foot building occupied by Smart & Final Extra! was built in 2003 and is situated on 2.16 acres at Madison Avenue and Los Alamos Road near Interstate 15, according to Hanley Investment Group.

Smart & Final benefits from co-tenants at the location, including Best Buy and Sportsman’s Warehouse, with nearby national and regional retailers including Home Depot, Kohl’s, Lowe’s, Target, Walmart, 99 Cents Only, Albertsons, Ashley HomeStore, Best Buy, Big Lots, Big 5 Sporting Goods, Chick-fil-A, IHOP, McDonald’s, PetSmart, Savers, Starbucks and Wells Fargo.

"Investors were also attracted to the long-term lease, affluent demographics in the area and its growing population," Asher said. "The average household income is nearly $115,000 within a five-mile radius of the property."

Smart & Final is one of the oldest and longest continuously operating food retailers in the United States and operates more than 250 stores in California, Arizona and Nevada with additional stores in Northern Mexico operated through a joint venture.

Smart & Final was recently acquired by Bodega Latina, the parent company of El Super and Fiesta Mart, and a subsidiary of Mexican supermarket operator Grupo Comercial Chedraui.

"As an essential business and daily-needs tenant, single-tenant grocery investments have remained one of the most sought-after retail assets in this market," Asher said. "Investors see a flight to safety and security in the grocery sector. Hanley Investment Group has experienced significant demand for single-tenant net-leased grocery assets in markets across the U.S. in 2021 and we expect this trend to continue in 2022 and beyond."