Decron Properties has acquired Mira Mesa Market West Shopping Center, a 238,747-square-foot retail center in San Diego.
Stockbridge Capital Group sold the fully leased asset for $99 million. Furthermore, the acquisition of the property included the assumption of the current financing with New York Life Insurance Co., which has a below-market interest rate of 3.5 percent fixed for the remaining loan term.
The purchase represents the first retail acquisition for Decron since 2008. The company operates in markets across California, Arizona and Washington, while its retail portfolio encompasses 600,000 square feet. Despite some disruption in the retail industry, including economic downturns and the growth of e-commerce, investors are adapting to the new retail landscape.
Back in 2016, Stockbridge acquired the asset from DSB Properties Inc. in a $229 million deal, with the help of a $200 million acquisition loan provided by KeyBank. The mortgage was then shortly refinanced by two loans totaling $103 million funded by New York Life Insurance Co., according to San Diego County records.
A lukewarm San Diego retail market
Located at 10604 Westview Parkway, the 20-acre property is near Interstate 15 and some 16 miles north of downtown San Diego. Dating back to 2000, the shopping center is anchored by Home Depot, Smart & Final and CVS. Other tenants include Dave’s Hot Chicken, Starbucks, Rubio’s Baja Grill, Jersey Mikes, PNC, Verizon Wireless and Lazy Dog restaurant.
In the first quarter of this year, the vacancy rate in the San Diego retail market was up 26 basis points since the previous quarter, hitting 4.1 percent, according to a Colliers report. The average sale price for retail space and shopping centers decreased to $335 per square foot, but experts predict that deals will pick up in the second half of this year.