CBRE announced a 15-year lease to Smart & Final, the value-focused warehouse-style grocery chain, in Huntington Park, CA.
CBRE collaborated across multiple business units to structure the pre-lease and construction of the first two-story Smart & Final store. CBRE’s Jamie Brooks represented the landlord, a private real estate owner, and Shahin Adeli of CBRE Debt & Structured Finance arranged construction financing via a reverse build-to-suit lease.
Shahin structured an $8 million new loan to pay off the existing debt, provide cash-out at close, allow for reimbursement payments to be drawn from loan proceeds, and provide an additional $1 million cash out to the landlord once the project is completed and certificate of occupancy received. Smart & Final was responsible for obtaining building permits for the construction of the property. Brooks was able to resolve several challenges, including changing construction costs and extension of deadlines.
The property, at 7130 Mission Place and 3111 East Florence Avenue, is just south of Downtown Los Angeles, an area well-known for its vibrant culture. Smart & Final was actively seeking a new location in Huntington Park for several years. The new site sits within a 5-mile radius of a densely populated neighborhood, home to more than 1 million people.
Consumer interest in discounted, off-price and low-priced goods has increased significantly in the wake of the 2008 recession. Spending has partially shifted toward lower-priced options across most categories and has benefited sectors such as discount markets and fast-casual restaurants. Despite the recovery of the overall economy, the U.S. consumer has retained interested in low prices and values, according to CBRE’s latest holiday retail report.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
