Lee & Associates Transacts Sale of Shuttered Kmart Building to U-Haul
Property generates interest from several different user types before selling for $5.2 Million
Lancaster, CA—Feb. 1, 2018– A shuttered Kmart store has traded to a self-storage operator in a deal that illustrates some of the ways retail real estate is being re-purposed in today’s market, according to John Battle, SIOR, who represented the buyer and seller in the transaction.
The property, located at 1810 W. Avenue J at the corner of 20th Street West in Lancaster, CA, was sold for $5,200,000 to the real estate arm of U-Haul, which plans to operate it as a self storage and truck rental facility.
“We had a lot of inquiries for this property but the highest and best use was self-storage, and we proceeded with that strategy,” said Battle.
U-Haul, which will open its second facility in Antelope Valley with this purchase, will convert the retail building from its current 110,000 square feet to 80,000 square feet and utilize a portion of the surrounding 9.28 acres of land for rental truck storage.
Battle was awarded the listing after another brokerage had unsuccessfully tried to sell it for two years.
“I quickly realized there was no reason a property of this type shouldn’t sell if it was priced correctly,” he added. “Once we dropped the listing price, we received inquiries from healthcare users, retail developers and automotive users.”
The building is well-located just in front of Antelope Valley Hospital with a Home Depot and Walgreens nearby, generating interest from physicians seeing an opportunity to transform it into a medical center as well as an RV seller and a few retail developers.
The seller, a family trust, had owned the building since 1970 before retailers such as Kmart began to see the sharp sales declines the sector is now experiencing. The Avenue J KMart location closed about five years ago.
Battle believes that the recent activity at the Northrop Grumman Corp. plant in Palmdale is generating renewed interest in real estate in the city of Lancaster. Northrop Grumman is in the process of ramping up for an $80 billion contract it received several years ago from the U.S. Air Force to build a new generation of stealth bomber. The company has begun construction on a 1 million-square-foot expansion at its facility and hired over 2,000 workers with an estimated 5,000 to 6,000 new hires anticipated in the next 18 months.