Retail Opportunity Investments Corp., a San Diego-based real estate investment trust that buys shopping centers, is making a nearly $85 million investment in Huntington Beach’s retail market.
The company, which also goes by ROIC, last month closed on the purchase of 5 Points Plaza, a 161,000-square-foot center at the intersection of Main Street and Beach Boulevard in Huntington Beach.
5 Points, which is midway between the San Diego (405) Freeway and Pacific Coast Highway, is 99% leased and anchored by a Trader Joe’s and Old Navy.
The property changed hands for $52.4 million, or about $325 per square foot.
An affiliate of Bellevue, Wash.-based Metrovation Capital was the property’s seller. 5 Points had a $17.2 million loan tied to it at the time of the sale, according to regulatory filings.
ROIC said it would pay for the center with $43.6 million in cash, plus $8.8 million in stock.
The deal adds to a quickly growing Orange County portfolio for ROIC. The company currently has 52 properties along the West Coast, including four centers in OC.
Last December, ROIC paid $27.6 million for Cypress Center West, a nearly 106,000-square-foot shopping center on Ball Road in Cypress, and $27.7 million for Harbor Place Center, a roughly 120,000-square-foot shopping center on Harbor Boulevard in Garden Grove. It bought both properties from a Glendale-based family trust.
At the time of the two purchases, ROIC said it had the right of first refusal to buy another Huntington Beach center, Peninsula Marketplace, from the same seller.
It said that deal is now moving ahead.
The company said at the time of the 5 Points acquisition that it has a binding contract to acquire the 95,000-square-foot Peninsula Marketplace for $32.5 million, or about $342 per square foot.
Peninsula Marketplace is about two miles from the ocean at Goldenwest Street and Garfield Avenue. It’s fully leased and is anchored by a Ralphs. It last traded hands in 2003 for a reported $27.2 million.
ROIC’s only other OC property is the Santa Ana Downtown Plaza, a nearly 100,000-square-foot center that it paid about $17.3 million for in early 2010.
“Having secured a record $368 million in shopping center acquisitions, 2013 is proving to be our most active and successful to date,” Stuart Tanz, ROIC’s president and chief executive, said in a statement.
Tanz, prior to coming to ROIC, served as the chief executive of San Diego-based Pan Pacific Retail Properties, now part of Kimco Realty Corp.
In 2008, he was nominated to the board of then-Santa Ana-based Grubb & Ellis Co. in an unsuccessful proxy battle.
Expensive Address
The glitzy buildings on Newport Center Drive fell down a notch in a recent brokerage report of the most expensive streets for office space in the U.S., but don’t expect that to translate into cheaper rents there any time soon.
Chicago-based brokerage Jones Lang LaSalle recently listed Newport Center as the 10th most expensive U.S. street for office rents, with average monthly rents of $4.17 per square foot.
Newport Center Drive was ranked No. 9 two years ago. San Francisco’s California Street took advantage of the surging office market in Northern California to leap from No. 10 in the last survey to No. 6 this time around, with monthly rents of $5.17 per square foot. It knocked down Newport Center offices one spot.
There’s no need to shed a tear for Newport Beach-based Irvine Company, owner of most of the offices on Newport Center Drive. Rents for buildings there have increased 4.3% since the last Jones Lang LaSalle report, and rents are still nearly twice as high as the $2.14 average monthly rent for Orange County’s overall office market, according to the brokerage’s report.
Sand Hill Road in Menlo Park remains the country’s most expensive street, with monthly rents averaging $9.23 per square foot.
The new report comes as Irvine Co. continues construction of a 19-story office at 520 Newport Center Drive, where leasing plans haven’t been formally disclosed. The real estate giant is considering using the building for its own operations, as well as leasing out all or part of the building.
Irvine Co. officials said they’re still evaluating the market and their own needs and haven’t decided on leasing plans for the new tower.
