A Fullerton shopping center has sold in a deal that’s among the tops for an Orange County commercial real estate transaction in 2022, the latest sign of rejuvenation for the area’s retail sector.
A venture led by Irvine-based World Premier Investments paid $102.5 million for a majority of the Fullerton Town Center, a 219,902-square-foot retail complex at the intersection of Harbor Boulevard and Orangethorpe Avenue that counts Amazon Fresh among its anchor tenants.
Another portion of the shopping center is set to make way for multifamily construction following a separate sale to a residential developer, records indicate.
New York-based Kimco Realty Corp. sold the 11-building center for about $466 per square foot. Reza Investment Group represented Kimco in the deal; NewMark Merrill advised the buyers and will manage the center.
$1.8B Sales Volume
The sale adds to a string of retail investments over the past year as shopping center owners look to spruce up their tenant roster or add new uses to boost foot traffic
Grocery-anchored centers have outperformed other retail types during the pandemic, as consumers focused on essential purchases, sending U.S. grocery sales to new highs and attracting investors looking for safer bets.
Amazon Fresh, one of the fastest-growing specialty retailers in the county, moved into the former Toys R Us at the shopping center in early 2021.
Other tenants at Fullerton Town Center include Costco, Ross Dress for Less, Five Below, WSS and an AMC Theatre.
It’s the second largest retail sale in the region since the start of the pandemic, trailing the $160 million sale of the Long Beach Exchange at the end of last year. Newport Beach-based Burnham Ward sold the 266,000-square-foot retail project for nearly $600 per square foot.
Prior to that sale, the top retail deal in OC during over the course of the pandemic was a $53 million sale of a Home Depot site in Anaheim.
Area retail property sales jumped 61% to $1.8 billion for the year ending June 30, according to CoStar Group data, bolstered by a 3.9% increase in rents.
Mixed-Use Plans
Fullerton Town Center is one of many area centers planning redevelopment that will add homes and new commercial uses to a portion of the mall.
Texas developer Streetlights Residential won city council approvals in December to build a five-story mixed-use development including 329 apartments on a 4.5-acre site that currently includes retail buildings and a parking lot. The ground floor of the project will include 6,500 square feet of commercial space.
Apartments will include studio, one- and two-bedroom layouts with at least 17 units restricted for low-income households.
A six-story parking structure with 567 spaces is also proposed.
MainPlace Overhaul
Numerous redevelopment projects featuring housing as a key component are underway across the county to breathe new life into many of the region’s older malls.
Such projects include Westminster Mall (see story, page 1); the former Laguna Hills Mall; Brea Mall; and MainPlace Mall in Santa Ana. Apartment development plans are also under consideration for the Irvine portion of the Market Place shopping center.
Those redevelopment projects could add north of 4,500 apartments and more than 1 million square feet of new commercial space.
MainPlace Mall owner Centennial Real Estate Co. is still in the early stages of reworking the traditional shopping center format into a “true mixed-use development,” according to Executive Vice President of Development and Construction Oliver Robinson.
The approximately $500 million redevelopment entails 492,000 square feet of small shop space, two residential complexes with 720 multifamily units, an office space, a new dining concept, a plaza and a live music venue. Two department stores will remain, though the mall’s overall retail footprint will decrease, as Centennial prioritizes entertainment venues and specialty concepts to match market demand.
A planned 4,000 capacity concert venue is an example of that effort, as well as replacing the traditional food court with the new indoor-outdoor dining concept.
The assets in Centennial’s portfolio “have too much retail square footage for today’s market,” Robinson said. “We’re looking to bring in other uses and to reduce that retail square footprint.”
MainPlace’s 309-unit Paloma apartment complex, which broke ground in January, will be complete by the end of 2023, officials say. Centennial expects construction for MainPlace’s other residential complex, indoor-outdoor dining concept and concert venue to finish throughout 2025 and 2026.
While the shift from traditional retail to mixed-use developments has been widespread, it’s not a new trend, Robinson notes.
Mixed-use has existed in Europe “since civilization began. [We’ve] seen it in a lot denser markets in America forever.”
So rather than creating a new way of enjoying retail, “we’re just catching up to the rest of the world” in these “more traditionally sprawling U.S. markets like in Texas and Orange County.”
