Newport Beach-based Burnham USA Equities Inc. says it has money to spend on value-add acquisition opportunities, after selling off a big retail property it recently developed in the city of Orange.
Burnham, a commercial real estate investor whose best-known local property is the South Coast Collection shopping center in Costa Mesa, this month sold a building occupied by a Best Buy Superstore at 2375 N. Tustin Ave., just off the Costa Mesa (55) Freeway.
El Segundo-based Continental Development Corp. bought the 45,675-square-foot building, which sits across the street from the Village at Orange shopping center. It the company’s only property in Orange County.
Terms of the deal weren’t disclosed.
The property, which brings in about $1.6 million in rents annually, was being marketed for a little under $23 million. Dixie Walker with the Newport Beach office of Grubb & Ellis Co. brokered the deal.
Burnham USA built the property on a 4.7-acre site in 2008. Best Buy has a lease at the site that runs more than 10 years, and the site isn’t among those the retailer recently tagged for closing.
The developer still has close to a half-dozen properties in the city of Orange and also counts several Best Buy-occupied stores among its portfolio, including one in on Chapman Avenue in Orange, said Scott Burnham, chief executive of Burnham USA. The goal is to find good acquisition targets—most likely value-add retail properties—to redeploy the money from the sale, he said.
Burnham USA is “actively looking” to place the money from the Tustin Avenue sale into new purchases in the $25 million range, he said.
His company has made several similar deals in the past few years, including a Laguna Niguel shopping center building along Alicia Parkway that Burnham USA paid about $7.6 million for in 2010—about a third of its peak-market price.
The new owners recently got arts-and-crafts retailer Hobby Lobby Stores Inc. to ink a lease for the entire building, which should open next month.
Burnham USA, on a larger scale, is putting the finishing touches on its redevelopment of the South Coast Collection, a shopping center on Hyland Avenue that the company bought at a fire-sale price of $35 million in 2009 and has since remade into a high-end mall featuring design showrooms, studios, specialty retailers and eateries.
The center previously was known as South Coast Home Furnishings Center and sold in late 2007 for close to $100 million before going back to the bank as vacancy rates there plummeted.
Some $20 million worth of rehab work has been done at the property, which after seeing a few legacy tenants replaced in the next few months will be approaching full occupancy, Burnham said.
Notable new and soon-to-arrive tenants at the mall include Fixtures Living, a fully functional kitchen, bath, patio store, the Chuck Jones Center for Creativity art studio, and the Vintage Wood Floor Co., which makes floors from antique reclaimed materials.
There’s also a slew of new dining options at its open-air OC Mart Mix shopping and dining portion of the Costa Mesa center, and the mall is getting ready to see the opening of the Iron Press, which will tempt foodies with a combination of waffle sandwiches—a la Bruxie of Orange and Brea—and craft beers.
Newport Center Trade
Newport Beach-based DMP Properties bought a 23,000-square-foot office and retail building a few blocks from their Newport Center headquarters.
An affiliate of DMP Properties, a family-owned and operated commercial real estate investment company, paid a reported $7.2 million for 250 Newport Center Drive, a three-story building in Design Plaza, adjacent to Fashion Island.
Monthly rents at the building run about $2.85 per square foot, according to CoStar Group Inc. data, which show the prior owner as Tuffree Enterprises of Yorba Linda. The building is about 90% leased.
Karen Sunday, with Newport Beach-based Karen Sunday & Associates, brokered the deal.
DMP Properties has been based in Newport Beach for the past 20 years and also has offices in Temecula and Upland.
The company’s portfolio totals about 15 properties, with a majority of those buildings in OC, according to the company’s website.