51,312-Square-Foot Value-Add Shopping Center in South Orange County Sells for $11.63 Million

Hanley Investment Group Real Estate Advisors, a real estate brokerage and advisory firm specializing in retail property sales, and Walseth Investment Company, specializing in single-tenant, multi-tenant, sale-lease-back, NNN investments and land properties nationwide, have announced the completion of the sale of a 51,312-square-foot former Orchard Supply Hardware-anchored shopping center in Mission Viejo. The property, located at 24011-24031 Marguerite Parkway, sold for $11.63 million.

Hanley Investment Group‘s executive vice presidents Kevin Fryman and Bill Asher, along with president Ed Hanley, represented the seller, a private investment company based in the Denver metro area. Walseth Investment Company‘s president Michael Walseth represented the buyer, an Orange County-based regional grocery store operator.

“We procured multiple competitive offers from private investors, mid-market buyers and owner/users, ultimately securing an all-cash private buyer,” said Fryman. “This transaction involved navigating and resolving several complex challenges.”

Walseth added, “As the user of the space, our buyer was in a unique position to acquire the property and allow the seller the ability to monetize the vacant Lowe’s space. A ‘win-win’ for both parties, maximizing proceeds to the seller, yet allowing the buyer a favorable basis well under replacement cost.”

Additionally, Walseth and Fryman successfully negotiated a structured closing to satisfy the buyer’s need for the approval of its planned use and enabled the seller to optimize their buyout agreement with Lowe’s (Orchard Supply Hardware), which had approximately 12 years remaining on its lease.

The shopping center benefits from its location at a high-traffic, signalized intersection of Marguerite Parkway and Trabuco Road, which sees an average of 34,000 vehicles per day. Marguerite Parkway serves as a major arterial route connecting to and from the I-5 freeway and various parts of Mission Viejo.

Situated on a 3.42-acre parcel, the shopping center was built in 1973 and underwent a façade remodel in 2016. The 37,118-square-foot vacant Orchard Supply Hardware store comprises over 72% of the center’s total square footage. Current tenants include A Cut Above, Little Caesars and Leslie’s Pool Supplies, all of whom have occupied the center for at least 10 years. Notably, Little Caesars and Leslie’s Pool Supplies have been tenants for 31 and 34 years, respectively, underscoring the center’s established presence.

The demographics within a five-mile radius of the shopping center are strong, featuring over 340,000 people with an average household income of $154,000. As one of the largest master-planned communities ever undertaken in a single project, Mission Viejo has a population of 93,932 within the broader Orange County population of 3.24 million.

Fryman noted the strength of the South Orange County retail investment market, stating, “Despite broader market headwinds, South Orange County continues to be a highly sought-after retail investment destination due to its affluent demographics, strong household incomes and limited supply of well-located properties. Furthermore, the ongoing development of new housing communities in the surrounding areas is expected to further fuel demand for retail goods and services, making this a particularly attractive market for both owners/users and investors with a long-term vision. This sale underscores the resilience and inherent value of strategically positioned retail assets in this dynamic region.”

Information was sourced from Hanley Investment Group Real Estate Advisors. To learn more, contact kfryman@hanleyinvestment.com.