The building where Kerman's Grocery Outlet is located was purchased by a Bay Area investor. Photo via Hanley Investment Group

published on June 15, 2022 - 2:06 PM
Written by The Business Journal Staff

A Kerman investment property housing a Grocery Outlet caught the eyes of a Bay Area investor, costing to the tune of more than $6 million.

Hanley Investment Group, representing the unnamed seller, reported the closing of the 16,000 square-foot, single-tenant property for $6.37 million, for a capitalization rate of 4.9%.

A private investor from San Mateo County represented by Kidder Matthews purchased the property, which opened in May 2021.

“We generated multiple competitive and qualified offers in the first week of marketing the property before securing a 1031 exchange buyer that closed at 100% of the asking price,” said Bill Asher, executive vice president with Hanley Investment Group. “Grocery Outlet describes itself as the nation’s fastest-growing extreme-value grocery retailer and opened 36 stores in 2021, with plans to open 28 stores in 2022.”

The Grocery Outlet is the only national grocery brand in the city of nearly 15,000, though along Madera Avenue are four other food stores. Just west on Whitesbridge Avenue is a Walmart Supercenter. 

This sale will be the fourth single-tenant Grocery Outlet in California Hanley Investment Group has sold in the last five months, all of them below a 5% cap rate.

“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,” said Asher. “Investors see a flight to safety and security in the grocery sector, especially with a value grocery retailer like Grocery Outlet. Hanley Investment Group has experienced significant buyer demand for single-tenant net-leased grocery assets in markets across the U.S. in the last several years and we expect this trend to continue in 2022 and beyond.”


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