SOCO—the hip mix of furniture, fashion, design and food tenants along the San Diego (405) Freeway in Costa Mesa—has gotten a new ownership structure and a big boost in its valuation.
Rockwood Capital LLC, a Los Angeles-based real estate investor, last week closed on a $120 million investment in the retail center, which also goes by the name of South Coast Collection.
The 300,000-square-foot center has more than 75 stores and sits on 20 acres.
Rockwood’s investment amounts to $400 per square foot for the property, putting SOCO among the highest-valued large retail centers in Orange County based on recent property sale prices.
There have been only three sales in the past five years of larger-sized retail properties in OC at prices exceeding the $400-per-square-foot mark, according to data from market tracker CoStar.
Burnham-Ward Properties, an affiliate of Newport Beach-based Burnham USA, sold an undisclosed interest in the center to Rockwood but keeps a minority stake in the property.
Burnham-Ward executives said it will remain “an active participant in the property” and continue to oversee all management functions of the center, which is now nearly fully occupied.
The deal marks a big run-up in SOCO’s value. Burnham-Ward bought it in 2009 for about $35 million. At the time, the mall—then known as the South Coast Home Furnishings Center—was struggling to retain tenants as a result of the recession and housing downturn.
It opened in 2006 near the peak of the housing market and was sold by developer Irvine-based Birtcher Development & Investment Co. in late 2007 for about $100 million.
The buyer—a Costa Mesa-based entity operating as South Coast Home Furnishings Center LLC—defaulted on an $84 million loan, and Burnham-Ward bought the property out of receivership.
The new owner spent millions to upgrade the property and changed its focus to a mix of design, home furnishings, fashion, restaurants, culinary offerings, and other specialty retail.
The OC Mix—an indoor collection of boutique retailers and food offerings at the center—has become a template of sorts for other redesigned malls in the area in recent years.
“We are so proud of what we have created at SOCO under our leadership as it has become one of the most talked-about newly inspired retail concepts of the decade,” said Scott Burnham, chief executive of Burnham USA, in a statement.
Joel Mayer, managing director at Rockwood, said in a statement that the deal “exemplifies Rockwood’s investment strategy of acquiring unique experiential retail assets in top tier infill urban markets.”
Rockwood said it now manages a portfolio of about $3.6 billion in real estate investments, whose value now tops $9 billion.
Its investors include public and private pension funds, endowments, foundations, insurance companies, fund of funds, high net-worth individuals, and family offices.
