Gary Jabara, one of Orange County’s top telecom executives, has bought a pair of prominent retail-focused properties along Coast Highway in Laguna Beach and Huntington Beach as part of a nearly $150 million push into commercial real estate over the past month.
The founder and chairman of Newport Beach-based Mobilitie LLC, the country’s largest privately held wireless infrastructure firm, recently bought Surf City’s 5th & PCH property, a roughly 96,000-square-foot mixed-use development that opened in 2008 and includes a combination of ground-floor retail and offices.
The site traded hands for about $65 million, or $677 per square foot, according to property records. A 157-room Kimpton Shorebreak that’s in the same development wasn’t part of the sale.
On a per-square-foot basis, it’s the biggest retail-focused sale for a larger property in Huntington Beach in four years, according to data from market tracker CoStar Group Inc.
About 18 miles away, he also bought Aliso Creek Shopping Center, a nearly 50,000-square-foot mall also along Coast Highway. The CVS and Gelson’s Market-anchored center is across the street from the Montage Laguna Beach resort.
Property records indicate the center sold for $57.6 million, or nearly $1,172 per square foot.
It’s the highest price-per-square-foot deal on record for an anchored shopping center in OC, according to brokers from JLL that worked on the transaction.
Boardwalk Investments
Those two properties, as well as a high-end Restoration Hardware restaurant, gallery and wine tasting property in the Napa Valley city of Yountville, were bought by Jabara’s Boardwalk Investments Group, a newly established entity that runs his already-extensive commercial real estate portfolio here and in other California markets.
The buys are not part of Mobilitie, and are rather long-term private investments, Jabara said last week.
“We’re not a fund, we’re not flipping. We’ll keep them as legacy holdings,” he told the Business Journal.
Last month’s dealmaking is the largest reported collection of commercial real estate buys for Jabara, who over the past decade has become one of the area’s largest private real estate owners and investors, using proceeds from his work at Mobilitie.
He’s also invested in residential real estate, via the Villa Real Estate brokerage in Newport Beach that he founded in 2013, as well as other ventures, such as Mexican beer maker Chihuahua Cerveza.
Chihuahua’s flagship restaurant is at The Landing shopping center, which he also owns, on the Balboa Peninsula.
‘Primo’ Locations
The challenging market facing retail center operators, and by extension their real estate owners, isn’t lost on Jabara.
“If you are not in an ultimate location, you can suffer,” he said.
Irvine’s Ten-X projects by the fourth quarter of 2022, the effective rental rate per square foot for the national retail sector will increase by only 1%, while the vacancy rate will increase by 10 basis points.
PCH, and the Napa property he just bought, though, qualify as “primo” locations, he said.
“You really can’t lose on real estate down here,” he said of PCH-area investments.
Jabara said he’s not planning any major overhauls of the two area properties. For 5th & PCH, he’s looking to add more street parking to the site and freshen up some of the exterior looks at the property, he said.
“We’re super-excited about these sites,” he said of the two OC investments. “You can’t build these kinds of [assets] anymore” along the coast of OC.
Mother Ship
Despite the recent real estate push, Jabara notes a bulk of his time remains focused on Mobilitie, which among other business lines such as operating cellphone towers and outfitting sports stadiums with upgraded communications networks, is helping some of the world’s largest wireless carriers prep their networks for the rollout of 5G, the next generation of mobile connectivity.
“Mobilitie is the mothership,” said Jabara, who began the company in 2006.
In the next five to 10 years, 5G-related work will result in the “greatest investment in wireless infrastructure we’ve ever had,” said Jabara, whose fortune the Business Journal conservatively estimates to be in the $700 million range.
He said the latest deals were bought with cash on hand.
Jabara began investing heavily in the area’s commercial real estate sector in 2012, after selling a portion of cellphone towers his company owned for some $1.1 billion. He still retains, and has added to, a portfolio of cellphone towers and small cell stations that is said to run in the thousands.
Mobilitie in August announced a $1 billion investment from an undisclosed foreign investment fund to fuel 5G wireless deployment.
More real estate buys are expected under Boardwalk Investments. Jabara said he’s looking to other markets outside the state, such as Austin, Texas, for future deals.
