SANTA ANA, CA—One of Orange County's oldest cities, Santa Ana's Downtown area is emerging as a hip, desirable location for creative new business and young entrepreneurs, CBRE's EVP Philip Voorhees tells GlobeSt.com. As we recently reported, CBRE's national retail investment group–West team has completed the sale of McCalla Centre, a 110,620-square-foot neighborhood shopping center here, to a San Diego-based private real estate investment-fund manager for $31.8 million. We spoke with Voorhees about the Santa Ana retail market, how development is looking for the region and what investors are seeking here.
GlobeSt.com: How would you characterize the retail investment market in Santa Ana?
Voorhees: All buyer types continue to favor retail properties in the coastal counties and in areas with high population density and high barriers to entry. Santa Ana is one of Orange County's oldest cities. Its Downtown area is emerging as hip, desirable location for creative new business and young entrepreneurs. For-sale retail inventory is near historic lows in Santa Ana, and like many "urban" locations in SoCal, investor sentiment for Santa Ana is positive.
GlobeSt.com: What does retail development look like for this region?
Voorhees: Santa Ana is located at the geographic center of Orange County, and Orange County's real estate fundamentals remain very strong, particularly for retail. Higher household incomes, lack of land for development, and strong tenant demand are just a few favorable factors for Orange County. Land inclusive, the "replacement cost" for high-quality retail in Orange County generally exceeds $325 per square foot. In most Orange County locations, the rent tenants can afford would support new development. The aforementioned lack of development land necessitates redevelopment in Orange County's infill markets. Retail shop rents ranging from $3 per square foot to $5 per square foot per month at most new projects, combined with the current low interest-rate/low cap-rate environment, are producing some exceptional pricing per square foot.
GlobeSt.com: What new types of tenants are entering the market?
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
