Orange County value-add retail center sells for $39.5M

NEWPORT BEACH, Calif., Jan. 19, 2022 – JLL Capital Markets announced today that it has closed the $39.5 million sale of and arranged $28.9 million in acquisition financing for Gateway Center, a 79,001-square-foot retail destination in the Orange County community of Mission Viejo, California.

JLL marketed the property on behalf of the seller, Gerrity Group, LLC. DJM Capital, a San Jose, California-based investor with $2 billion AUM, acquired the asset. Additionally, working on behalf of the new owner, JLL secured the three-year, floating-rate acquisition loan.  

Completed in 1979, Gateway Center is leased to a synergistic mix of national and local tenants, including Starbucks, Cold Stone Creamery, Subway, Baja Fresh, Happy Minds Academy, Oggi’s, San Diego Credit Union, Gateway Liquor, Dance Daly Ballroom, Fit Pilates, Thai Body Works, Saddleback Urgent Care, Sweet Pediatric Dental and French’s Pastry. The diverse combination of daily needs and service-oriented attract a large customer base from an extended trade area, as more than 55.39 percent of center visitors travel more than three miles to the property and spend an average visit time of 78 minutes.

Gateway Center is housed on 7.35 acres at 23972-24042 Alicia Parkway in the heart of affluent, master-planned communities in Mission Viejo, a community in south Orange County. The center is conveniently positioned along Alicia Parkway on the “going home” side where it intersects with Jeronimo Road, exposing the property to more than 78,000 vehicles a day. This highly visible and accessible location is less than two miles from the I-5 Freeway within a dense, infill location that include more than 163,200 residents with average annual household incomes exceeding $139,460 within a three-mile radius.

The JLL Retail Capital Markets team representing the seller was led by Managing Directors Gleb Lvovich, Bryan Ley and Geoff Tranchina and Senior Director Daniel Tyner.  

“The sale of Gateway Center represents a resurgence of investor interest in retail in general and shop space in particular,” Lvovich said. “People ultimately want to gather, socialize and support retailers in their community. We are excited to watch DJM reposition and enhance the property to capitalize on the strong fundamentals in the space.”

“Gateway Center is a prime example that strong, well-located neighborhood strip centers are only getting better,” Ley added. “The property grew its tenancy by adding new, dynamic retailers throughout the pandemic and increased both its occupancy and rents. Retailers need to be closer to their customer base, and centers like Gateway Center display the opportunity that exists with an improved tenant mix, which add value to the communities they serve.” 

The JLL Debt Placement team representing the new owner included Senior Managing Director Jeff Sause and Senior Director John Marshall.

“JLL appreciated the opportunity to build a highly competitive financing market for DJM that included offers from banks, insurance companies and low-cost debt funds,” Sause added. “The abundance of interest was reflective of best-in-class sponsorship as well as continued demand from the debt capital markets for strong retail assets.”

JLL Capital Markets is a full-service global provider of capital solutions for real estate investors and occupiers. The firm's in-depth local market and global investor knowledge delivers the best-in-class solutions for clients — whether investment sales and advisory, debt advisory, equity advisory or a recapitalization. The firm has more than 3,000 Capital Markets specialists worldwide with offices in nearly 50 countries.

For more news, videos and research resources on JLL, please visit our newsroom.