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Friday, Jun 21, 2024

Burnham Ward Updates the Old, Preps for the New

As Burnham Ward Properties continues to work through the construction process for its larger projects underway in Dana Point and Laguna Niguel, the Newport Beach-based retail developer is focusing on upgrading some of its smaller holdings along 17th Street in Costa Mesa.

The company has wrapped a multimillion-dollar renovation and rebranding of Paseo 17, a roughly 24,000-square-foot shopping center formerly known as Plaza Sereno, as the company transitions the once service-based office complex into a boutique retail hub.

Burnham Ward paid about $6 million for the center located at the intersection of East 17th Street and Westminster Avenue in 2010. It expects to bring the center to full occupancy in the coming months with new boutique retail, restaurant and fitness tenants.

“We’ve always been inspired by the property, which was originally developed as an office property but has great bones,” President Bryon Ward told the Business Journal. “We’ve had so many comments from the community about how they love to visit the site, but their visits are sporadic, due to the tenancy.

“The transition to a more boutique retail shopping center has been a natural one.”

Leasing Efforts

The center’s anchor tenant of sorts, Greenleaf Kitchen & Cocktails, has been in its 3,500-square-foot space since 2012.

That site, the largest parcel at the center, was part of widespread upgrades for the project that began last year, with Burnham Ward investing in new outdoor gathering areas, landscaping, signage, parking lot improvements and other cosmetic upgrades.

The property’s newest addition is Milligram Coffee + Kitchen, which occupies a 1,000-square-foot space where it serves food and specialty coffee; its new patio, added as part of the renovations, is home to events like “vinyl Sundays,” wine tastings and a run club.

“Through the recent remodel, we’ve seen the property transform and take on a new life for the community,” CEO Scott Burnham said. “We look forward to announcing additional exciting new businesses joining the dynamic tenant mix soon.”

Burnham Ward has three additional deals in the works slated to close in the coming months, including a new bakery concept. Spaces range from about 600 square feet to Greenleaf’s 3,500-square-foot slot.

The availability of smaller retail blocks sets the property apart on 17th Street, Ward notes, as well as the center’s Spanish-style architecture that draws on Costa Mesa’s ranching and farming roots.

“Scott and I committed to owning this property, and all of our properties on 17th Steet, for the long term,” Ward said.

Burnham Ward counts north of 90,000 square feet of retail buildings along 17th Street and the adjoining Westcliff Drive, spanning both Costa Mesa and Newport Beach, including sites occupied by Mendocino Farms, Gracias Madre, Kit Coffee and Starbucks.

Historic Restoration

Elsewhere on the same street at 1901 Westcliff, Burnham Ward is working on another renovation, this time for a medical office building that dates back to the 1960s.

The nearly 20,000-square-foot Mariners Medical Arts building was designed in 1961 by famed Austrian-American architect Richard Neutra.

“We are working closely with the city of Newport Beach to restore and maintain the architectural integrity of this property, bringing it back to its original condition as opposed to putting a modern spin on it,” Ward said.

The site is fully leased to a variety of healthcare tenants.

Community Hubs

Burnham Ward is known for creating legacy retail hubs that have garnered community and investor attention.

The Long Beach Exchange shopping center is one example; Burnham Ward paid about $100 million to redevelop the 26-acre site into a 266,000-square-foot retail project, and it sold last year for nearly $160 million, the largest reported retail sale in the region since the start of the pandemic.

Burnham Ward is also the developer of Costa Mesa’s OC Mix and South Coast Collection, Newport Beach’s Castaway Commons, and oversees much of the retail and restaurant space in the Lido Marina Village along with San Jose-based DJM Capital Partners Inc.

Dana Point Revitalization

In Dana Point, the developer is working with two other Newport Beach firms, R.D. Olson Development and Bellwether Financial Group, on the long-planned overhaul of the city’s harbor, a nearly $400 million project that’s been in the works for more than two decades.

The project is slowly but surely progressing through construction, with Bellwether kicking off the first part of the redevelopment last year with extensive upgrades to the marina portion.

Burnham Ward is preparing to break ground on the first phase of its retail project in January 2024.

“The retail component is a five-phase process, with a parking structure and infrastructure site work comprising the first two phases,” Ward said.

It’s not clear what tenants will remain following the upgrades to the waterfront and wharf buildings, which includes restaurants like Proud Mary’s and Wind and Sea as well as clothing and gift shops.

“The new tenancy will be a combination of local favorites alongside new and vibrant retail concepts,” Ward said.

R.D. Olson, the largest hotel developer on the West Coast, is the final entity to move through the entitlement process, with plans for the two hotels currently under review by the coastal commission.

“Though there have been a lot of disruption in the financing markets, we are able to move ahead on our projects and avoid that disruption,” Ward said.

The company is also moving ahead with plans to develop the Laguna Niguel City Center, which will add 275 apartments alongside retail, office and restaurant space as part of a community hub themed with the city’s ranching history in mind.

Burnham Ward and its residential partner in the project, Sares Regis, received the city council’s green light last year; it previously planned on beginning work on the $200 million project this year, but it has kicked the construction start to the summer or fall of 2024.

Retail Revival

It appears Burnham Ward’s bet on Orange County is a safer one; the market has set itself apart from others when it comes to the post-pandemic retail revival.

A September 2022 report from CBRE cited Orange County as the No. 1 market to see gains in asking rent growth over the next two years for neighborhood, community and strip centers, coming ahead of Tampa, Fort Lauderdale and Las Vegas.

Rents are expected to grow nearly 14% through September 2024, with limited space availability driving such gains.

A separate market report from Marcus & Millichap noted OC began the year with the nation’s smallest retail pipeline, and California’s lowest vacancy rate.

“Supported by a sizable cohort of higher-earning professionals, the metro’s median household income is among the nation’s highest, indicating Orange County residents may have larger discretionary budgets than individuals in nearby markets during a period of potential economic volatility,” the 2023 investment forecast said.

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