Palmdale Retail Center Sells for $13.5 Million

A 58,652-square-foot retail center anchored by Smart & Final and Barnes & Noble has sold for $13.5 million, closing out a three-year effort to break apart and sell a multi-property portfolio within Palmdale Marketplace piece by piece.

The buyer is a private investor based in Southern California. The seller, a family office that operates retail centers across the country, was represented by Matthew Mousavi and Patrick Luther, both Senior Managing Principals at SRS.

Smart deal. Both tenants had 10 years remaining on their triple net leases at the time of closing. Under that structure, the landlord collects rent while the tenant carries most of the property’s operating costs, including taxes, insurance, and maintenance. For a passive investor, that’s an attractive setup. You get steady income without the headaches of day-to-day management. That’s exactly the kind of deal that draws high-net-worth buyers who don’t want to run a property, they want to own one.

“Due to the offering being grocery anchored under newly extended leases, we received multiple offers from private and institutional profiles, ultimately selecting a local high net worth investor,” Luther said in a statement.

The property sits within Palmdale Marketplace, a large retail complex built out around major tenants including Target Corp., Lowe’s Cos., and Sprouts. The specific parcel that sold was built in 1999 and houses just the two tenants, Smart & Final and Barnes & Noble, making it a tighter, cleaner asset than the broader center.

The $13.5 million sale represents the sixth and final transaction in what Mousavi described as a deliberate break-up strategy executed on behalf of the ownership over roughly three years. Previously sold pieces of Palmdale Marketplace included the Shops at Marketplace, along with individual pads occupied by Vitamin Shoppe, Five Guys, and Café Rio, among other smaller shops. Taken together, those six deals totaled $32 million.

Selling retail parcels one at a time instead of packaging them as a single asset is a strategy that doesn’t always get enough attention, but it can move the needle significantly on total returns. The theory is straightforward. Institutional buyers, who typically have the capital to absorb large mixed portfolios, demand a discount for taking on complexity and scale. Private investors, by contrast, will pay a premium for a simpler, well-leased asset they can understand and manage. Break the portfolio into digestible pieces and you access a deeper pool of buyers who are willing to compete.

“We have successfully created significant additional value for our client by breaking up the asset and selling to private investors at more favorable price points than if we were to transact with a single buyer, ultimately maximizing returns for the seller,” Mousavi said.

The execution here took three years. That’s not a quick flip strategy. It requires patience, sequencing, and a broker willing to market each property individually rather than bundle everything and move on. Not every family office has that appetite.

The Antelope Valley retail market has had its share of headwinds. Palmdale sits about 60 miles north of downtown Los Angeles, and vacancy rates in suburban retail corridors across the region have been uneven as consumer habits shift and older big-box formats face pressure. Still, grocery-anchored centers with long-term leases hold value better than most retail categories. Grocery is one of the few segments that has held up against e-commerce pressure, and a fresh 10-year lease from a grocer like Smart & Final signals that the tenant sees the location working for at least another decade.

Barnes & Noble’s continued presence is worth noting on its own. The bookseller went through bankruptcy in 2019 and was acquired by Elliott Advisors, and the chain has since stabilized under new ownership with a focus on smaller, community-oriented stores. A 10-year lease commitment from Barnes & Noble in 2026 or 2026 isn’t something you’d have predicted five years ago.

The LA Business Journal first reported the details of the transaction, including the lease terms and the broader six-property breakdown.

For Burbank-area investors watching the broader San Fernando and Antelope Valley markets, this deal offers a useful data point. Private capital is still chasing well-structured retail. The price per square foot on this transaction works out to roughly $230, which reflects the quality of the tenancy more than the location itself. Comparable assets closer to the urban core would command a higher number, but the lease structure closes that gap.

The takeaway isn’t complicated. Long leases, creditworthy tenants, and a hands-off ownership structure still find willing buyers. That part of the market hasn’t broken.