Costa Mesa’s South Coast Home Furnishings Center has traded hands again at a fraction of what the struggling shopping center was worth just a few years ago.
Newport Beach-based Burnham USA Equities Inc. last week closed on a court-overseen purchase of the 300,231-square-foot mall, for slightly more than $35 million.
It’s the biggest Orange County sale of a commercial property,both in terms of price and square footage,in several months.
Burnham, a real estate developer and investor, expects to put several million dollars into the property, including more prominent signs along the San Diego (I-405) Freeway, an aggressive marketing campaign and possibly a new name for the center.
It also plans to add other types of tenants to the furniture showrooms and stores that are there now, according to Stephen Thorp, Burnham’s executive vice president.
“We’ll be going after a broader swath of tenants,” Thorp said. “Three hundred thousand square feet of furniture stores doesn’t work right now.”
Burnham also is planning to bring on a new leasing team, Thorp said.
The deal looks to be a steal for Burnham,assuming it can lease up the property, which has struggled to attract shoppers and tenants amid the housing downturn.
The center, which opened in 2006 near the peak of the housing market, was sold by developer Irvine-based Birtcher Development & Investment Co. in late 2007 for about $100 million.
The property’s prior owner, a Costa Mesa-based entity operating as South Coast Home Furnishings Center LLC, defaulted on an $84 million loan to La Salle Bank Corp., part of Bank of America Corp., last August. It was one of the first big local commercial properties to default on a loan because of the deteriorating economy.
The property was put into court-ordered receivership the following month. The court initially aimed for a $65 million sale, but dropped its price once offers didn’t come close to that value.
For more on this story, see the Feb. 16 edition of the Orange County Business Journal.
