OC Insider: Shopping Sprees – Orange County Business Journal

It’s been a mixed bag for sales of prominent freeway-fronting Orange County shopping centers of late.

Costa Mesa’s South Coast Collection, just off the 405 Freeway, traded hands in 2023 for a respectable $110 million and $377 per square foot, while Mission Viejo’s long-troubled Kaleidoscope center that overlooks the 5 Freeway last year sold for just $35 million and $138 PSF.

The current owners of Huntington Beach’s Bella Terra shopping center are hoping to get a PSF price that falls on the high end of that range for their roughly 840K-SF property at the intersection of Beach Boulevard and the 405, which was recently listed for sale.

A report from real estate trade publication Real Estate Alert, owned by Newport Beach’s Green Street Advisors, cites an asking price in the $300M range, or around $350 PSF.

If that price is met, it would become “one of the biggest single-asset trades of a U.S. retail property within the past four years,” the Real Estate Alert report said.

There hasn’t been a single-asset commercial real estate sale in OC topping $300M since Laguna Beach’s Montage resort was bought by Tilman Fertitta for $650M in 2022.

Bella Terra was valued around $290M in 2015, when a unit of Prudential Real Estate Investors took a 75% stake in the center.

San Jose-based DJM Capital Partners, which has owned and operated the shopping center since 2005, has the remaining stake in the property, which is reported to be over 95% occupied.

The list of discounted office tower sales continues in OC: see Kaitlin Aquino’s front-page exclusive on device maker MicroVention’s $44M buy of PacLife’s former nine-story regional base in Aliso Viejo.

The 243K-SF building, built in 2008, traded for about $182 PSF.

PacLife last year said it was seeking around $80M for its Aliso Viejo tower.

The total price paid by MicroVention isn’t too far off the $42M that local investor Joe Wen paid last year for One Pacific Plaza, the nearly 394K-SF office campus in Huntington Beach, next to the Bella Terra shopping center.

That September 2023 deal, OC’s first notable lender-facilitated office sale in the wake of the pandemic, worked out to a much lower PSF price, $107. It marked a 66% valuation decline from its last trade in 2018.

Waterford Property Co. co-founder John Drachman took center stage last month at the Business Journal’s Excellence in Entrepreneurship Awards, where he and business partner Sean Rawson were honored for their work building a sizeable portfolio of affordable and workplace housing in SoCal.

This month, Drachman and his wife, Laura, helped stage a different performance: they were among the honorary producers for Prelude to a Kiss, a musical at South Coast Repertory. The show runs through May 5.

It marked the second year running a Business Journal award winner has been an honorary producer at South Coast Repertory. Sabra Health Care REIT’s Talya Nevo-Hacohen, a Women in Business Award winner in 2020, last year backed the production of avaaz at the Costa Mesa theater.