REAL ESTATE NEWS

Grocery stores drive consistent daily and weekly traffic, making these centers highly attractive to food and beverage, fitness and healthcare.

This is especially true in Orange County, where the high cost of land and construction, strict zoning and lengthy entitlement processes constrain new supply, according to Matt Hammond, principal at Coreland Companies.

This week, Barings sold Seacliff Village, a grocery-anchored shopping area located in Huntington Beach, California, to Asana Partners, in a deal arranged by JLL Capital Markets for $151 million.

Hammond called it "a well-established retail destination near the affluent coastal area [that] generates significant demand,"

"This combination of limited new supply and strong tenant performance gives landlords the platform to push rents and enhance value. With a vacancy rate that hovers around 3%, Orange County grocery-anchored retail is the most sought-after asset class in the market."

Seacliff Village is at the intersection of Yorktown Avenue and Main Street and offers visibility along Main Street and Goldenwest Street. More than 93,500 vehicles pass by per day.

The property attracts over 4.3 million annual visitors and benefits from strong demographics, including an average household income of $168,658 and an average home value of $1.42 million within a one-mile radius.

The 253,234-square-foot retail center is 95.8% occupied and anchored by a high-performing 69,925-square-foot Albertsons store.

The property, on the 26.74-acre site, features a diverse tenant mix of nationally recognized brands, including Starbucks, Panera Bread, LA Fitness, Staples and four banks with over $1.15 billion in combined deposits.

The institutional-quality asset offers stability through its 58% credit tenant income stream with upside potential, as in-place rents are at only 80% of market rates.

Gleb Lvovich, managing director in the Orange County office of JLL Capital Markets, said the transaction underscores the premium valuations that best-in-class grocery-anchored assets continue to command in prime coastal markets.

"With its exceptional demographics and rent growth potential, Seacliff Village represents the type of institutional-quality retail investment that attracts substantial investor competition," he told GlobeSt.com.

Tim Kuruzar, Northmarq's senior vice president, told GlobeSt.com that grocery-anchored centers with strong demographics and execution upside remain one of the most sought-after retail asset classes in today's market, especially in Southern California.

"We're seeing renewed institutional interest in grocery-anchored retail across core Southern California markets like Los Angeles and Orange County, driven by durable fundamentals and a deep buyer pool," he said.

"Capital is coming from all directions—private high-net-worth investors, institutional groups, and well-capitalized regional operators—which creates strong liquidity for well-located assets."

Kuruzar added that the continued improvement in debt availability and tighter spreads is helping close the bid-ask gap and support pricing.

"At the property level, owners are successfully driving value through shop-space leasing, rent growth, and thoughtful placemaking initiatives that enhance foot traffic and customer visits," he explained.

Greg Lyon, chairman and president of the Los Angeles-based firm Nadel Architects, which specializes in retail development, told GlobeSt.com that grocery-anchored centers remain the gold standard for retail resilience.

"Currently, the market is shifting toward high-impact repositioning and strategic ground-up builds, as exemplified by projects such as West Roseville Marketplace and the upcoming Central Plaza," Lyon said.

"The real driver of performance today is community-centric design; by evolving these centers into social destinations through intentional aesthetics and activation, we can transform a routine errand into a meaningful neighborhood experience."

Source: GlobeSt/ALM