West Florida Avenue 2200, Hemet, CA, 92545, US

Hemet Valley Mall

Asset Description

Jones Lang LaSalle Americas, Inc. (“JLL”), as exclusive advisor, is pleased to present the opportunity to acquire Hemet Valley Mall (“the Property”). Located in the heart of Hemet, the Hemet Valley Mall presents investors a prime retail repositioning opportunity within a dense trade area. The current occupancy stands at 93.9% and includes 11.42 acres of additional land with redevelopment potential. The Property sits off of the highly trafficked Florida Avenue, and benefits from over 43,000 vehicular impressions per day. Hemet Valley Mall features a mix retail uses, with tenants such as Hobby Lobby, JCPenney, Chili’s, Bank of America, Starbucks, and more.

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Attributes

Building area net

23,446 m²

Occupancy

93.9%

Year built

1981

Media

Investment Highlights

Secure Income Stream Offered At An Attractive Basis

Hemet Valley Mall is currently 93.9% occupied, demonstrating strong tenant demand and providing investors with stable future cash flows. Currently Hemet Valley Mall has approximately 76.7% of the GLA leased to national tenants such as Hobby Lobby, Bank of America (Credit: A2/A-), Panda Express, Starbucks (Credit: Baa1/BBB+), AT&T (Credit: Baa2/BBB), and Chili’s (Credit: Ba3/BB-).

The extremely below market rents for larger box spaces (Sears, Hobby Lobby, and JCPenney) provides investors with income stream security and future redevelopment upside. In addition, the below market rents for large portions of tenancy allows Hemet Valley Mall to be offered and an extremely attractive basis per square foot on land (1.5MM SF) and improvements (252,370 SF).

Rare Site Optionality With Flexible Redevelopment Options

The entire site is owned and includes (10) separate parcels consisting of (3) single-tenant net-leased pad buildings, (1) multi-tenant pad building, (1) multi-tenant indoor shops building, (3) large format boxes and (2) parcel of unimproved land. Mixed-use development is permitted at the site due to the site’s General Commercial (C-2) zoning. This offers investors the flexibility to execute a phased development plan with the option to sell individual parcels to reduce basis or take advantage of cap rate arbitrage.

Highly Visible Location with Excellent Accessibility

Located on Hemet’s main retail corridor of West Florida Avenue (43,000 VPD), Hemet Valley Mall offers investors the opportunity to acquire a premier high visibility location. West Florida Avenue serves as the primary east/west arterial through Hemet and is the major retail node within the market. The Property also benefits from excellent accessibility via five (5) points of ingress/egress that includes a dedicated left-hand turn lane on Florida Avenue as well as signalized access on adjacent streets surrounding the Property.

High-Performing Out Parcel Net Lease Pads

Hemet Valley Mall features a premier line-up of single and multi-tenant F&B / Service tenants along West Florida Avenue. These operators include Starbucks (Drive Thru), Panda Express, AT&T, Chili’s (Single Tenant), Polly’s Pies (Single Tenant) and Bank of America (Single Tenant). For tenant’s that report sales, the average annual volume stands at $741 PSF. By retaining the net-lease retail pads, investors will benefit from an in-place income stream that would fund permitting / future development. Alternatively, investors will have the flexibility sell off individual parcels to reduce basis or take advantage of cap rate arbitrage.

Growing Hemet Retail Market

The Hemet retail micro-market has seen significant growth in asking rents over the past five years. The current average rental rate is $21.89 per square foot per year, up 21.4% from the 2016 average of $18.03. Current vacancy rates stand at 8.2% within the submarket however there are currently no projects under construction along Florida Avenue. Given the relatively low vacancy and lack of new product being delivered to the micro-market, rental rates will continue to grow moving forward.

Strong Daytime Population

Hemet Valley Mall is located within Hemet’s main employment centers with a daytime employee count of approximately 147,194 within a 5-mile radius. The strong daytime population in the area provides Hemet Valley with a broadened customer base, supporting tenant sales.