IRVINE, CA—Retail first remains relevant by adjusting its tenant mix and second, by updating its physical plant, CBRE EVP Phil Voorhees tells GlobeSt.com. Voorhees and his National Retail Partners-West team recently completed the sale of the Triangle, a 204,523-square-foot coastal dining and entertainment lifestyle center in Cosa Mesa, CA, on behalf of the seller, a partnership led by Greenlaw Partners.

The Triangle is anchored by the numerous restaurants including Yard House; the nightclub Time; a flagship 24-Hour Fitness location; Tavern & Bowl; and the nine-screen Triangle Cinemas. The iconic property sold to a Los Angeles-based family-office syndicate for $55.7 million, representing a high 6% cap rate. The property was approximately 94% occupied at the time of sale.

We spoke with Voorhees about what gives iconic properties like the Triangle staying power and how private buyers approach ownership of these properties.

GlobeSt.com: What gives iconic retail properties like the Triangle staying power?

Voorhees: Location, location, location. Sited at the foot of the 55 Freeway, the “gateway” freeway to some of Orange County's most popular beaches in Newport Beach and Huntington Beach, the Triangle is a landmark. More than 100,000 cars per day pass the property, and the affluent surrounding trade area features both residential and commercial density. “The Peninsula” in Newport Beach and Costa Mesa attract many new college graduates that often reside in the area for a number of years before settling down. For this demographic, the property is “always new.” As retail continues evolving, the Triangle's dining, entertainment, health, beauty and fitness uses are the most desirable in retail, and many of these tenants perform at tremendous sales volumes at the Triangle.

GlobeSt.com: How do these properties maintain their relevance and success over decades of changes in the retail arena?

Voorhees: Retail first remains relevant by adjusting its tenant mix, and next, by updating its physical plant. The Triangle's prior ownership performed a major project renovation a few years ago, spending millions to improve the project' signage, lighting, access and exterior aesthetics. The Triangle's huge parking structure permits its array of dining and entertainment uses. Many properties simply cannot accommodate the Triangle's higher intensity uses. In the long run, this makes The Triangle's physical plant/characteristics inherently attractive in this high-traffic, “urban density” location.

GlobeSt.com: How do private buyers approach ownership of these properties differently than institutions might?

Voorhees: Family-office investors tend to take a very long-term approach to running assets they intend to hold indefinitely. Accordingly, they can spend capital and structure leases in ways that a time-constrained, institutional investor cannot. For example, an institutional investor with a five- or 10-year-hold may not be inclined to spend capital that would benefit the project outside of the desired hold period. CBRE expects the new owner, a high-net-worth family-office partnership, will curate the property's tenant line up, likely adding tenants from its other properties to boost the Triangle's dining and entertainment mix. This ownership group is experienced and accomplished, and CBRE expects will play an active role in coaching existing Triangle tenants to even higher sales performance.

GlobeSt.com: What else should our readers know about this transaction?

Voorhees: The Triangle sale represents the team's largest transaction where no tenant in the center provides goods or services attainable online. You cannot take a date to dinner online, nor can you go to the gym online. The Triangle's new ownership bought the property at a discount to its land-inclusive replacement cost. Said differently, the new ownership bought a dollar for 60 cents. The ownership's low basis in the property and dynamic, Internet-resistant tenant line up in this affluent coastal location will permit the new owner's excellent flexibility in optimizing the Triangle over the decades to come.

We spoke with Voorhees about what gives iconic properties like the Triangle staying power and how private buyers approach ownership of these properties.

GlobeSt.com: What gives iconic retail properties like the Triangle staying power?

GlobeSt.com: How do these properties maintain their relevance and success over decades of changes in the retail arena?

GlobeSt.com: How do private buyers approach ownership of these properties differently than institutions might?

GlobeSt.com: What else should our readers know about this transaction?

Instant Insights /

The Secret Behind Iconic Retail Assets' Longevity

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