Case Study: Savi Ranch | Yorba Linda, CA

Challenge

Savi Ranch is a ±160,773 square foot shopping center located off the freeway in Yorba Linda, California. The center boasted a healthy and strong tenant mix of retailers such as Dick’s Sporting Goods, Bed Bath & Beyond, Michaels, and Thomasville Furniture. While the property was located in a thriving overall market, access to the property was very challenging, and the center had four large boxes with near term expirations and declining sales.

Strategy

Matthews™ created best-in-class marketing materials and formalized a strategy to expose the entirety of the asset. To leverage off the separate parcels, Matthews™ utilized the “Breaking Up of Retail” strategy to provide a new investor the opportunity to sell off assets to raise capital or be accretive to the current cost basis. During the listing period, Matthews™ received three other listings that were sold at record-breaking cap rates. The team utilized these sales as supporting evidence that selling separate pads resulted in more significance than the whole. Matthews™ paired the investment to a foreign buyer with debt lined up to provide them a strong cash-on-cash return and acquisition, as well as multiple exit strategies.

Results

The Dick’s Sporting Goods, Bed Bath & Beyond, and Michaels sold for $32.5M. Located adjacent, a 25,074 Buy Buy Baby also sold for $6.3M, achieving a national cap rate record for the chain. A foreign buyer purchased the center’s Best Buy for $10.2M at a 6.07% cap rate, a record in California since 2016. The free-standing La-Z-Boy, an 18,630 square foot parcel, closed for $5.4M within two weeks of going on the market to an investor who was seeking a single-tenant asset for stable cash flow and ease of management. The ability to find a buyer was critical, and utilizing the Matthews™ debt platform provided tremendous control of the process. As a result, Matthews™ broke three records and sold a difficult power center. The team was not only able to execute the deal, but they were also able to push pricing.