Combined parcels on Balboa Island’s Marine Avenue sell for $4.4 million

A pair of parcels on Balboa Island’s iconic Marine Avenue sold recently for $4.4 million, according to a recent news release from the brokers on the deal at Faris Lee Investments and SSG Realty Corp.

The combined property — which includes 325, 327, 329 and 331 Marine Avenue — is on roughly 0.12 acres of land and was built in 1952. It’s designed for mixed-use retail and residential with two second-story housing units. The storefronts are occupied by Shirley’s Heart and SportsRents.

Brokers said the appeal of the property is its rarity and described it as a “generational” investment for its anonymous but local buyers. It sold in little less than a week after going on market, according to Jeff Conover, who is the managing principal at Faris Lee Investments.

“Balboa Island is an especially unique place, but there’s also just not a lot of retail that’s there [around the island]. It’s all mostly concentrated on Marine Street,” said Greg Swedelson, a managing partner at SSG Realty Partners. “There is just not a lot of building going on in that area anymore, but the other [appeal] is the price point. You hear a lot about commercial real estate ... but with these types of assets, we’ve been finding [buyers] at this price point for this type of unique real estate.”

Conover said that the fact that the property is on two separate parcels is significant in that it could serve for possible redevelopment as much as it could remain the same, depending on the property owners.

Swedelson said the sellers were longtime clients at SSG Realty Partners.

“This property requires active management, not just because of the retail but the apartments associated with it. I think our client was ready to step away from active management. I think that, combined with the fact that it was a really good time to sell this type of property, led to them selling,” Swedelson said.

Swedelson added that mixed-use properties are popular investment choices that offer “real ground floor presence” for stores and lend themselves to housing as well, which helps diversify cash flow.

That makes them desirable, but finding them is difficult, he said.

“Just the fact that, especially on an island and in Newport Beach, all [property] is going to be supply and demand. There’s nowhere else to build. That was the attractiveness to this — the uniqueness of being on an island on a retail, boutique-y street, the demand will always be there for both types of tenants. You’re on an island, on a retail thoroughfare and that makes this really appealing,” said Conover.

Shaun Riley, of Faris Lee Investments, noted the leases are short-term, so the owner could feasibly rework the property faster than usual.

Swedelson confirmed that the two businesses — Shirley’s Heart and SportsRents — aren’t going anywhere anytime soon. Brokers said they prioritized searching for a buyer that would be a good steward and would be sensitive to its location. Swedelson confirmed the owner is in the Newport Beach area and that there are no known plans to redevelop.