Despite the headwinds facing retail real estate, including the continued rise of ecommerce, the Orange County retail market remains resilient. Statistics are favorable. Vacancy is low at 3.7 percent and average market rent is $32.29 per square foot, up 1.15 percent from last year. Cap rates remain nearly 200 basis points below the national average, signaling buyer sentiment that OC retail is a relatively safe haven. Ground-up development is slow and selective, shoring up demand and keeping rates up for the foreseeable future. The interesting thing is that the market trends are pervasive. Let’s identify a few. Drive-thru restaurants are on fire. Tenants like Chick Fil-A, Raising Cane’s, Starbucks, In-N-Out, Panera and others are performing much higher in SoCal as compared to the rest of the country. Good sites are commanding competition, driving ground rents and drive-thru build-to-suit rents higher each of the past three years. Fitness, grocery, discount and entertainment uses are the most active players in the box category. It’s amazing to think the 1.5 million square feet of big boxes that were dumped on the market in 2017 and 2018 are now mostly accounted for thanks to these new users. EOS Fitness, Planet Fitness, ALDI, Burlington, At …
CORONA, CALIF. — San Diego-based Providence Capital Group has completed the sale of Rincon Corporate Plaza, an office building located at 355 E. Rincon St. in Corona. ZHOPE LLC acquired the asset for $11.8 million, or $200 per square foot. At the time of sale, the 58,850-square-foot property was 100 percent leased to 17 tenants, including Lennar Homes, Wells Fargo and Verizon. Anthony DeLorenzo, Gary Stache, Doug Mack, Sammy Cemo and Bryan Johnson of CBRE represented the seller. Shaun Moothart and Jenifer Ansari, also of CBRE, arranged financing for the Corona-based buyer in the transaction.
LAGUNA BEACH, CALIF. — LaSalle Investment Management has completed the disposition of Aliso Creek Shopping Center, a retail asset located at 30814-30936 Pacific Coast Highway in Laguna Beach. Although the sale price was not released, it marked the highest price-per-square-foot sold for an anchored shopping center in Orange County, according to JLL, which brokered the deal. Situated on 4.2 acres, Aliso Creek Shopping Center features 49,149 square feet of retail space and was fully leased at the time of sale. Tenants include CVS/pharmacy, as anchor, Yoga Works, Starfish Laguna, Fantastic Sam’s, Pure Pilates, Chase Bank, Hand & Stone, Aliso Beach Animal Clinic and Z-Pizza. Gleb Lvovich, Bryan Ley and Daniel Tyner of JLL Capital Markets represented the seller in the transaction. The name of the buyer was not released.
SAN FRANCISCO — A joint venture between The John Buck Co., Golub & Co. and MetLife has completed construction of Park Tower at Transbay, a 45-story, 803,700-square-foot office tower in San Francisco’s Transbay district. The building is situated at the corner of Howard and Beale streets, two miles east of downtown San Francisco and four blocks from San Francisco Bay. Architect Goettsch Partners (GP) designed the 605-foot-tall building to include a covered, 3,600-square-foot outdoor plaza with a 35-foot ceiling at the base of the tower. A major focal point of this outdoor space is a site-specific art installation, titled “Night Writing” by Teresita Fernandez, which is integrated into the main wall of the tower’s core. Park Tower is certified LEED Gold. In May 2018, Facebook signed a long-term lease to fully occupy the building upon completion. “We’re pleased to welcome Facebook to Park Tower,” said Joel Redmon, San Francisco-based managing director for MetLife Investment Management’s real estate business, when the lease was announced. “We’ve worked hard to design an office of the future that will facilitate technological innovation and provide a great foundation for Facebook’s future success.” In addition to the outdoor plaza, Park Tower offers a series of large …
NEWPORT BEACH, LAGUNA BEACH, YOUNTVILLE AND CORONA DEL MAR, CALIF. — JLL has arranged $110 million in acquisition financing for Boardwalk Investments Group. The funds will be used for the purchase of a 12-property retail portfolio in Southern California. John Chun, John Marshall, Sam Godfrey and Jake Fideler of JLL Capital Markets placed the three-year, floating-rate loan with two one-year extension options. Michael Mestel of H.I.G. Realty Partners ran the transaction on behalf of the lender’s retail estate credit fund. Key assets in the portfolio include a CVS/pharmacy-anchored shopping center located at 30814-30936 Pacific Coast Highway in Laguna Beach; a Pavilions-anchored retail center at 3100-3152 Newport Blvd. and a high-street retail asset located at 2902 West Coast Highway in Newport Beach; a fine-dining retail property located at 6725 Washington St. in Yountville; and multiple coastal assets in Newport Beach.
FULLERTON, CALIF. — Goodman Group has acquired a 65-acre manufacturing and distribution property in Fullerton and plans to redevelop the site into a modern logistics campus named Goodman Logistics Center Fullerton. The project will support construction of up to 1.5 million square feet of new space, offering tenants space ranging from 170,000 square feet to 1.5 million square feet across a four-building campus. Slated for delivery in late 2021, the campus will feature potential for cargo/commuter rail service, significant paved trailer parking and cross-dock functionality with multiple points of ingress/egress. Glenn Dyke, Darla Longo and Barbara Emmons of CBRE represented the undisclosed seller, while Sean Ward and Ben Seybold, also of CBRE, were instrumental in the sale of the former distribution center.
SAN JOSE, CALIF. — Urban Catalyst has unveiled plans for Delmas Senior Living @ Downtown West, a seniors housing community in downtown San Jose. The community will be the first new seniors housing community in the city’s downtown area in decades, according to the developer. The property will feature 52 assisted living units and 23 memory care units in a mix of studios, one-bedroom, and two-bedroom layouts. Construction is slated to start in first-quarter 2021 for completion in fourth-quarter 2022.
SAN DIEGO — JLL has arranged the sale of Scripps Ranch Business Park, a fully leased R&D/industrial park in San Diego’s Scripps Ranch submarket. A partnership between San Diego-based Hill Properties and RGA ReCap Inc. (ReCap Real Estate Investments), on behalf of Reinsurance Group of America, sold the asset to Dollinger Properties for $23.2 million. Totaling 94,309 square feet, Scripps Ranch Business Park comprises five freestanding buildings that are fully leased to five tenants, including Siemens, USPS and Apria Healthcare. The business park is situated on 7.5 acres at 10060, 10070, 10080, 10090 and 10100 Willow Creek Road. Sach Kirpalani, Lynn LaChapelle and Bob Prendergast of JLL Capital Markets represented the seller in the transaction.
Orange County’s multifamily market fundamentals remain some of the strongest in the country as local real estate investors brace for new state-wide rent control policies beginning Jan. 1, 2020. There will undoubtedly be an education process for landlords regarding this new law and how it may impact the valuation of multifamily in the future, but the long-term stability of the overall apartment market looks bright. Orange County boasts historically low unemployment and low apartment vacancy, but the region continues to have a shortfall in the development of workforce housing. Orange County is expected to deliver about 2,900 new Class A units to the market in 2019, about 500 units more than last year. With an extended economic expansion throughout Southern California, Orange County has benefitted greatly with large segments of its population fully employed and seeking places to live. The county has one of the nation’s highest median home prices at more than $833,000, making homeownership unattainable for many of its residents. This workforce housing shortfall will continue to put further pressure on the demand in Orange County as its apartment average vacancy rate is anticipated to drop 40 basis points to a very low 3.4 percent in 2019. This …
RIALTO, CALIF. — A Southern California-based private investor has purchased Rialto-Aldi-WSS, a retail asset located on 2.4 acres at 630-660 W. Foothill Blvd. in Rialto. A Los Angeles-based private partnership sold the property for $8.8 million. Built in 2018, the asset features a 18,841-square-foot ALDI grocery store and a 12,430-square-foot WSS, a footwear and apparel retailer. Both ALDI and WSS have a corporate-guaranteed, long-term ground lease with fixed increases every five years and options to renew. Douglas Cole of Marcus & Millichap’s West Los Angeles office represented the buyer, while Bill Asher and Jeff Lefko of Hanley Investment Group Real Estate Advisors and Greg Bedell of Progressive Real Estate Partners represented the seller in the transaction.