Regency Centers Buys Orange County Retail Properties

Regency Centers has made a nine-figure retail investment in Orange County.

The Jacksonville, Florida-based real estate investment trust has spent $357 million on a five-property portfolio at the Rancho Mission Viejo master-planned community, Commercial Observer reported.

The South Orange County properties, which are 97 percent leased, sit near ritzy exurbs like San Juan Capistrano and Coto de Caza. The Rancho Mission Viejo LLC development company, which began building the 23,000-acre community in the 1960s, sold the properties to Regency Centers.

The five properties total nearly 630,000 square feet. Regency Centers will become the new owners of Bridgepark Plaza at 27702 Crown Valley Parkway; Mercantile West at 25636 Crown Valley Parkway; Mercantile East at 27502 Antonio Parkway; Terrace Shops at 1101 Corporate Drive; and Sendero Marketplace at 30721 Gateway Place.

Regency funded the five-property acquisition by assuming $150 million in mortgage debt from an undisclosed lender, according to CO. It also is using operating partnership units valued at $72 each as well as $7 million in cash to settle a separate secured loan.

“Our structure as an [umbrella partnership real estate investment trust] and ability to issue [operating partnership] units provided flexibility for the sellers in structuring the transaction,” Nick Wibbenmeyer, Regency’s president and chief investment officer for the Western U.S., said in a statement.

The acquisitions strengthen the firm’s foothold in “one of the most supply-constrained coastal markets in the U.S.,” John Mehigan, Regency’s west region senior vice president of investments, added.

The retail real estate sector is largely holding strong across the United States, with average retail vacancy in the first quarter at 4.1 percent, according to JLL data cited by CO. Overall investment in retail grew 13 percent year-over-year from the first quarter of last year, per JLL.

Unibail-Rodamco-Westfield is among the retail giants betting on Southern California. Earlier this month, the Paris-based conglomerate began firming up a $925 refinancing package tied to Westfield Century City, a 1.4-million-square-foot shopping complex near Beverly Hills.

— Chris Malone Méndez