Mira Mesa shopping center anchored by Home Depot sells for $99M

by Jennifer Van Grove

A Los Angeles-based real estate firm that has spent the past 15 years focused on residential projects is re-entering the retail sector with the purchase of what is said to be an extremely healthy shopping center in Mira Mesa.

Thursday, Decron Properties announced that it purchased the 238,747-square-foot Mira Mesa Market West shopping center at 10604 Westview Parkway from Stockbridge Capital Group LLC for $99 million.

The off-market transaction, which involved seven parcels, included the assumption of the seller’s $54 million loan with New York Life Insurance Company. The inherited loan has a 3.5 percent fixed interest rate for the remaining loan term.

Although the 20.2-acre property is zoned for mixed use and allows for high-density housing, Decron intends to keep the center as is.

“Never say never about any opportunity, but right now, we have gone into this deal with the plan of keeping it a shopping center,” David Nagel, Decron’s president and CEO, told the Union-Tribune. “The business plan is to own the shopping center for many years and enjoy the tenancy that we have. It is 100 percent leased with tenants who are thriving, and we have no reason to want to redevelop this and repurpose it because the asset works.”

Built in 2000, Mira Mesa Market West is the western half of the large, outdoor shopping center along Mira Mesa Boulevard near Interstate 15. The property, just west of Westview Parkway, is anchored by Home Depot, Smart & Final and CVS. Other tenants include Dave’s Hot Chicken, Cold Stone Creamery, Rubio’s Baja Grill, Starbucks, Jersey Mike’s, Verizon Wireless and PNC Bank. A Lazy Dog restaurant is also in the works, with construction expected to begin in a couple of months.

The center saw nearly 6.9 million visits in the past 12 months, according to a news release announcing the sale.

Decron Properties, a family-owned real estate business, has 57 properties in California, Washington and Arizona, most of which are multifamily apartment buildings.

Prior to the Great Recession, the privately held firm’s portfolio also included a number of retail assets, but the company shifted to mostly residential assets — selling off all but three retail properties — to weather the financial turbulence of the period, Nagel said.

“(Our real estate adviser) kept reminding us over the last year or two, ‘Retail is back. Shopping centers are full. They’re staying full. Those guys that had financial issues, they’ve survived. Those that needed to right-size their portfolio because of online sales have figured that out now. And now it’s a healthy industry and you should consider going back into that business,'” Nagel said. “And this purchase represents our first purchase back into being a shopping center owner.”

San Diego’s retail sector is an attractive investment given tight availability in the market, said Joshua Ohl, senior director of market analytics for real estate tracker CoStar.

The availability rate for retail space across the county is 4.8 percent, he said.

“The availability rate has only increased by about 10 basis points in the past year. It’s still trending near the lowest level in more than 15 years,” Ohl said.

Stockbridge Capital purchased Mira Mesa Market West for $109.4 million as part of a larger, $229 million transaction in June 2016 that included the sister Market East center, property records show.

Stockbridge Capital is retaining the eastern center — anchored by the Regal Edwards movie theater and home to Barnes & Noble and Old Navy — where the firm is contemplating a mixed-use redevelopment of the property, Nagel said.

“They’re using the equity that will come out of this sale to help them accomplish whatever that redevelopment will look like on the east portion,” he said. “Its underlining zoning is for high-density residential, and I think they’re continuing to pursue that. And we, of course, welcome that because we’ll have all these residents right across the street shopping in our shopping center.”

The newly adopted Mira Mesa Community Plan, approved in December 2022, seeks to boost the neighborhood’s population by transforming the area’s suburban strip malls, like Mira Mesa Market East and West, into urban villages. The mixed-use zone allows for up to 73 dwelling units per acre.

GET MORE INFORMATION

agent
Reyna Perea Lopez

Agent | License ID: 02118739

Name
Phone*
Message