Conrad pays $16.75 million for Citrus Heights retail center
By Ben van der Meer – Staff Writer, Sacramento Business Journal
Jan 4, 2022, 4:52pm EST
Even at 90% leased and with a popular new tenant, SummerHills Plaza was a bargain investment in the eyes of prolific real estate acquirer Ethan Conrad.
The Citrus Heights retail center closed escrow in late December to Conrad, who bought it for $16.75 million. That was about four years after seller Citivest Commercial Investments LLC, out of Newport Beach, bought the property for $14.75 million.
“What I found the most attractive in terms of being value-added is that the price per square foot is quite low, especially when the value of the Dutch Bros and the value of the long-term leased Raley’s is subtracted from the overall purchase price,” Conrad said in an email.
Anchored by a Raley’s, SummerHills Plaza is a center of about 135,000 square feet at 7811-7895 Lichen Drive, near the interchange of Antelope Road and Interstate 80.
Conrad said the occupancy figure is a bit deceiving because one of the other large tenants, Fitness 19, is paying what he described as less than fair-market-value rent and is on a month-to-month lease.
Over the next few months, Ethan Conrad Properties Inc. will work on improving the center, built in the 1960s, from a “7” to a “9” in terms of appearance, he said.
As well, the company will look to sell an acre-sized vacant piece of the property on its northeast corner. Conrad said that would be ideally suited for a self-storage business.
Coffee chain Dutch Bros. Inc. opened a new kiosk a few months ago in SummerHills Plaza, closest to the intersection of Lichen and Antelope. With strong sales, it should be a benefit to the entire tenancy of the center, Conrad said in an announcement email of the acquisition to his employees.
Subtracting the Dutch Bros. (NYSE: BROS) property and the vacant site, Conrad said, the property sold for about $140 per square foot, or less than half of replacement cost.
“I like grocery-anchored shopping centers because they are considered the best, most secure retail based on the significant customer traffic that successful grocery stores consistently generate,” he said.
SummerHills Plaza went through a full refurbishment in 2020, according to Institutional Property Advisors, which brokered the sale on Citivest’s behalf.
“It was the completion of our business plan,” said Dana Haynes, president of Citivest Commercial, on the timing of the sale. “We’d owned it for four years.”
Bill Rose of Institutional Property Advisors, along with Ed Nelson and Wyatt Figueroa of Marcus & Millichap, represented the sellers in the deal.
