Former Haggen building in Boca Park sold for $7M

Erik Litmanovich, chief executive of Southern California food producer Golden West Food Group, acquired the empty supermarket building at 820 S. Rampart Blvd., near Charleston Boulevard, property records show.

The $7 million sale, by Dallas-based Spirit Realty Capital, closed May 6.

The purchase by no means guarantees the long-vacant space will be filled anytime soon, but it shows that investors haven’t given up on big-box retail, despite industry woes. The purchase could also help close the book on Haggen’s venture to Las Vegas, where it opened several stores as part of a massive U.S. expansion before it sank quickly under its own weight.

Logic Commercial Real Estate co-founder Adam Malan, whose brokerage firm worked on the sale to Litmanovich and is trying to find users for the roughly 63,000-square-foot building, said even though the new landlord runs a food company, Litmanovich bought the former grocery store as a real estate investment and plans to fill it with one or two tenants.

Malan said his team is talking to specialty grocers, gyms, retailers and other prospective users.

Litmanovich did not return calls seeking comment Wednesday. Efforts to speak with a Spirit Realty Capital representative were unsuccessful.

Haggen went bankrupt nearly four years ago, and the continued vacancy of its former Boca Park store may seem, at first glance, like a head-scratcher. Formerly home to a Vons grocery, the store is in a busy retail complex, near affluent communities and off roads with plenty of traffic.

But according to Malan, the store has stayed empty amid longstanding use restrictions at Boca Park that stemmed from the shopping center’s developer, Triple Five.

He said the restrictions aren’t always clear-cut — they have qualifiers and caveats — and were a “daunting” element of the deal.

In general, such restrictions are designed to protect anchor tenants, and shopping centers built 10 to 30 years ago were often set up with them to guard a retail environment that’s different from today’s, he said.

Brick-and-mortar retail is on shakier footing as stores close locally and nationally amid a glut of competition and increased shopping online. Passersby might see the boarded-up former Haggen building and assume retail is dying, Malan said, but that’s not the whole picture.

“It’s not as straightforward as that,” he said.

James Grindstaff, vice president of planning and development at Triple Five, declined to comment on Boca Park’s use restrictions.

Haggen was an 18-store grocery chain when it exploded in growth overnight: Its ownership announced in December 2014 that it was acquiring 146 stores, with seven in Southern Nevada, as part of a merger-related sell-off by Albertsons and by Vons’ then-owner, Safeway Inc.

But Haggen quickly spiraled. It laid off workers, sued Albertsons for more than $1 billion in damages, and filed for bankruptcy protection in September 2015.

It now has 15 stores, all in Washington state, according to its website.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.