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Wednesday, Jul 24, 2024

Used Car Dealership Strikes Valley Land Deal

A used-car dealership chain focused on the Latino community is coming out West and will open its first California outlet in San Fernando. Tricolor Auto Group LLC of Dallas signed a seven-year lease to occupy about 13,000 square feet at 603 San Fernando Road in San Fernando earlier this month. The site was formerly a Dodge dealership that closed about six years ago. Daniel Chu, founder and chief executive of Tricolor, said the greater Valley region is a strong market for his brand. “We see Southern California as a very underserved market,” he said. Tricolor advertises only through what Chu called “Hispanic advertising channels,” has its website in Spanish and all salespeople and staff of each dealership are fluent in the language. Chu founded the company in 2007 with the help of private investors, who continue to help fuel its growth. It has quickly grown to 17 dealerships in Texas and Oklahoma. The San Fernando lease is worth about $2 million, according to J. Richard Leyner, senior vice president at the Encino office of NAI Capital Inc., who represented the landlord, Severyn Azkenazy, in the deal. He said the owner had been pushing hard to get another tenant in the space given its long vacancy. And once Tricolor was interested, the two parties had to wait for city approval, because there are ordinances in San Fernando that limit used-car dealerships. “They just wanted a reliable and strong tenant,” Leyner said. “But this is a solid company and will be good for that community.” San Fernando is a historically Latino city, dominated by a working class that may be unable to afford new cars. Tricolor operates similarly to CarMax Inc., the Fortune 500 company based in Richmond, Va. that built its reputation by making the used car sales experience similar to buying a new car. “The used car business is classically considered to be a predatory space,” Chu said. “But our whole model is built around trust. If a customer buys a car from us, we’re going to provide warranty coverage and we’re going to stand behind our product.” Chu would not release any financial or sales figures, but said the company has seen strong financial growth and is actively looking for more real estate in Southern California. The dealership in San Fernando should open next spring. Michael Haim Sharon, vice president at the Encino office of NAI Capital, also represented the seller, and Brendan McArthur, senior vice president at the downtown L.A. office of Jones Lang LaSalle Inc. represented Tricolor. Blockbuster Deals With the announcement this month that all remaining Blockbuster video stores will be closing, some top-notch Valley real estate will come back onto the market. But how landlords replace the stores may get tricky, as the average size of the defunct video stores is too big for some uses and too small for others. Take the 4,500-square-foot Blockbuster outlet at 2420 W. Burbank Blvd. in Burbank. The space could be divided for two tenants, since 2,500 square feet is typical for smaller restaurants. And those tenants tend to pay a substantially higher dollar-per-square-foot than conventional retail. But the store is a standalone outlet on a corner at Buena Vista Street with extremely limited parking that could make it very hard to serve two tenants. As it was, when Blockbuster was still going strong, customers often had to park on the street. “And once you start chopping it up, you make it Grade B space, and the rates go down,” said Todd Nathanson, president of illi Commercial Real Estate in Encino. The greater Valley region has eight Blockbusters which will put some 40,000 square feet of space onto the market as the closures occur, a process expected to finish in January. Locations in Camarillo, Simi Valley, Saugus, Burbank, Sherman Oaks, Mission Hills, Van Nuys and Canoga Park will close. There also are a few others that have sat vacant for years. Development Sale A 4 acre lot in Northridge sold this month for $16.3 million. The 19401 Parthenia St. property was purchased by real estate firm Carmel Partners Inc. of San Francisco from BMO Harris Bank NA of Chicago. It was on the market more than 250 days, according to real estate data firm CoStar Group Inc. CoStar research said the space is fully entitled and Carmel intends to develop an apartment complex on the 186,000-square-foot site. Staff Reporter Elliot Golan can be reached at (818) 316-3123 or [email protected]

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