LA Buyer Penetrates Challenging SV Market With Retail Buy Near Apple HQ
Paragon Commercial has acquired a nine-acre retail center that houses a 128k SF Target. The center is close to Apple’s campus and about one mile from Apple’s under-construction global HQ expansion. Paragon principal Jim Dillavou (here in the company's new El Segundo digs) tells us there's incredible upside to the center at 20745 Stevens Creek Blvd, and Paragon is definitely looking at a value-add play, which could be adding additional retail space or potential other uses, but it's too early to really know. The company is bullish on the market (who isn't?) and plans to make other acquisitions in the region this year, he tells us. In fact, Paragon has offers out on six other properties in the market and plans to open a NorCal office before the end of the year. The company declined to state the price tag on the buy or the identity of the seller, a private investor.
Jim tells us Paragon has been looking to enter the Bay Area retail market for well over a year, with unsuccessful bids on more than 30 assets. "It's a difficult market to penetrate, but this buy shows the sellers in the area we're very serious about the market," he says. The center is in Cupertino’s “Heart of the City Specific Plan,” which is designated as the city’s most important commercial corridor. The specific plan guides future development and redevelopment of Stevens Creek Boulevard, which the city wants to be more pedestrian-friendly.
Paragon has an existing relationship with Target, having owned multiple centers anchored by the retailer over the years, which helped precipitate the sale. Jim tells us the firm had been advising the seller informally for about 18 months prior to the deal. Apple employs more than 16,000 people in Cupertino, and the multifamily space also is exploding to meet demand. Irvine Co last month announced plans to add some 600 more units to its Hamptons apartment complex, which is just about two miles from the Target. Preferred Capital Advisors' Craig Zarro served as Paragon’s mortgage adviser on the acquisition.