Warm Springs Plaza Shopping Center For Sale $94.5M

By Jon Peterson, TheRegistrySF

New York City-based The Fortress Group is putting up for sale its 118,346 square foot Warm Springs Plaza shopping center in Fremont, according to offering documents circulated across the industry. The asking price that the owners are seeking is $94.5 million, or roughly $798 per square foot.

Fortress did not respond to any email seeking comment for this story. The listing agent on the sale is the CBRE Capital Markets Team for its National Retail Partners in the West Region. Those working on the sale include Philip Voorhees, Kirk Brummer and James Tyrrell. All of them work out of the company’s regional office in Newport Beach.

Should the asking price on the shopping center be reached, it would compute to a five percent cap rate on the sale, as written in the property’s offering document. This return would be based on the asset’s first-year net operating income of $4.7 million. There could be additional income produced by the property in the future, as well. Due to embedded rent increases, rollover of below-market rents to market and the lease-up of the two available suites, the NOI is projected to increase by more than $1.65 million over the anticipated hold period.

The institutional-quality shopping center has 99 Ranch Market as its grocery-store anchor. It signed a new long-term lease in 2019 that has over 14 years left to run. This tenant has reportedly generated over $25 million in sales volume or around $500 per square foot since its opening in 2021 at this location. The retailer has also invested over $10 million into its store.

CVS is the drug store anchor in the property, and other major tenants include Chase Bank, East West Bank, Carl’s Jr., Subway, Starbucks and Orangetheory Fitness. The property is currently 99 percent occupied. All of the tenants in the property provide food, beverages, convenience or services that cannot be replaced online and generate strong daily-trip traffic to the property. The weighted average lease term remaining is 9 years. Over 50 percent of the leased gross leasable area has been operating at the property for 10 years or more. Overall contract rents are around 12 percent below estimated current market rents.

Warm Springs Plaza is located at 46461-46703 Mission Blvd. in Fremont. The property is considered to be in an infill location with high barriers to entry due to limited sites available for future development. The property has plenty of parking with a total of around 850 stalls.

The shopping center has a five-mile trading area. There are around 10,000 people living within one mile of the property and the average household income exceeds $206,600. Within five miles, there is a population of 170,000, and the average household income exceeds $180,500.