Real Estate

Decron Properties Acquires 238,747 Sq. Ft. San Diego Center for $99M

Decron Properties acquires 238,747 sq. ft. Mira Mesa Market West for $99M, boosting San Diego portfolio.

By Tal Alexander

6/10, 11:40 EDT
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Key Takeaway

  • Decron Properties acquired Mira Mesa Market West Shopping Center in San Diego for $99 million, expanding its retail portfolio.
  • The 238,747-square-foot center includes major tenants like Home Depot and CVS, with 6.9 million visits recorded last year.
  • This acquisition aligns with Decron's strategy to exit the Los Angeles market due to restrictive legislative measures.

Decron Properties Expands in San Diego

Los Angeles-based Decron Properties has made a significant addition to its San Diego portfolio with the $99 million acquisition of the Mira Mesa Market West Shopping Center from Stockbridge Capital Group. This 238,747-square-foot retail center, located at 10604 Westview Parkway, is a prominent retail hub in the Mira Mesa market, featuring major tenants such as Home Depot, Smart & Final, and CVS. Decron CEO David Nagel highlighted the strategic importance of this acquisition, noting the enduring appeal of brick-and-mortar retail despite the rise of e-commerce.

Strategic Acquisition Details

The Mira Mesa Market West Shopping Center, established in 2000, spans 20 acres and recorded 6.9 million visits over the past year, reflecting its popularity. The acquisition included assuming existing financing from New York Life Insurance, with a favorable 3.5 percent fixed interest rate for the remaining loan term. This deal is part of Decron's broader strategy to enhance its presence in the San Diego market, following its $125.5 million purchase of the Margo at The Society multifamily development in December.

Shifting Focus from Los Angeles

Decron's recent investments in San Diego come as the firm exits the Los Angeles market, where it has sold properties totaling $212 million. CEO David Nagel cited restrictive legislative measures, such as the ULA tax and rent control, as key factors driving this shift. The difficulty in raising rents and the impact of new transfer taxes have led Decron to refocus its investments in less-regulated markets, where it sees greater growth potential and fewer legislative hurdles.

The Resilience of Brick-and-Mortar Retail

The acquisition of Mira Mesa Market West underscores a broader trend in the retail sector: the resilience of brick-and-mortar stores. Despite the dominance of e-commerce, there remains a strong demand for in-store shopping experiences. This trend is evident in the high foot traffic at Mira Mesa Market West and the continued interest from major retailers in maintaining a physical presence. Decron's investment reflects confidence in the long-term viability of well-located retail centers.

Management Quotes

  • David Nagel, CEO of Decron Properties:

    "We saw this as an opportunity to add a marquee retail asset to our growing San Diego portfolio. Only a few years ago, it was assumed that brick-and-mortar retail would be taken over by e-commerce. While there is still strong demand for online shopping, we are seeing a rise in people still wanting the in-store experience."
    "The firm cited restrictive legislative measures like the ULA tax and rent control as key factors... The difficulty in raising rents and the impact of new transfer taxes [led] the firm to refocus its investments in less-regulated markets."