Retail Redevelopment Site Trades

HUNTINGTON BEACH, CA—LBG Real Estate Companies, a Southern California-based investor in retail real estate, has completed the acquisition of a key retail redevelopment site here, from US Bank and has already progressed with much of the repositioning.

The property is prominently located on the hard southeast corner of Brookhurst Street and Adams Avenue (10026 Adams Avenue and 20002 - 20052 Brookhurst Street) and contains approximately 30,000 square feet of building area on 1.96 acres. It was acquired by US Bank when the bank took over Downey Savings.

US Bank issued a request for proposal to a few select developers for the acquisition and redevelopment of the property, consisting of three multi-tenant retail pad buildings shadow-anchored by a Stater Bros grocery store. US Bank is currently located on the corner and will relocate to another building on the site in conjunction with this acquisition. The entire property had been encumbered by a long-term ground lease that expired on December 31, 2013 and transfer of ownership to the winning developer was planned to occur after they obtained building permits.

In mid-2013, LBG was awarded the project for the sale/redevelopment of the property and has been performing preleasing and pre-development/entitlement work on the property since then, prior to the acquisition when the ground lease expired. This included creating the redevelopment plan for the property, which called for reducing the building area from 30,000 square feet to 24,000 square feet. Additional work included planning the relocation of US Bank, updating the façade, designing a new sign program, maximizing the parking plan/restriping, and redeveloping/demising the shop buildings.

LBG also commenced pre-leasing efforts and brought the property to 81% pre-leased prior to the closing. The 19,394 square feet of leases signed include PetSmart, US Bank, Phenix Salon and Tenet Healthcare. There is only 4,200 square feet of shop space still available, which can be divided into smaller suites.  LBG is handling the leasing in-house, and interested prospects can contact David Goldman.

The property is surrounded by many leading national retailers, which provides a strong consumer draw to the intersection. These include Target, Kohl's, Ralphs, Stater Bros., Sprouts, CVS, Chase Bank, JoAnn's, Wells Fargo, Starbucks, US Bank, and many others.

With the close of escrow, LBG has begun redeveloping all of the buildings and relocating US Bank, whose space will then be redeveloped for PetSmart. LBG expects to complete the renovation and re-tenanting in less than 12 months. LBG is led by principals' Douglas Beiswenger, David Goldman, and Leslie Lundin.

Commenting on the property, Lundin said, “Due to the infill nature of this location and difficulty in developing new retail properties in Huntington Beach, this acquisition provided a unique redevelopment and lease-up opportunity. This property represents some of the only available prime vacant space in this otherwise fully-occupied submarket. The space has been held off the market because of the ground lease that recently expired otherwise it would be fully leased and redeveloped."

Goldman added, “The site offers exceptional opportunities for retailers seeking a high visibility location in a prime Orange County market. Not only are the storefronts themselves highly visible but the three monument/pylon signs surrounding the property ensure the best exposure possible to both of the primary arterial streets that comprise this premier intersection.”