Orange County’s malls are in a deep state of transformation, with developers investing in overhauls of eight of the county’s largest shopping centers to consolidate under-utilized retail space and add more in-demand product types, such as housing, dining and entertainment.
All told, these overhauls have a construction value approaching $8 billion, according to city filings, Business Journal sources and estimates.
Additional regional shopping centers are eyeing their own reinvention as boutique and experiential retail continues to outperform traditional retail in the wake of the pandemic.
About 4 million square feet of retail space in OC was demolished over the past year, according to industry data.
“For these redevelopment opportunities, the land has more value than the structures that are on it,” Shopoff Realty Investments CEO Bill Shopoff told the Business Journal.
Housing plays a large role in these redevelopments as mixed-use rebuilds grow in popularity. The number of mixed-use apartments, also known as “live-work-play” developments, have quadrupled over the past decade in the U.S. from 10,000 to 43,000 units per year, according to data from RentCafe.
Across the eight projects profiled by the Business Journal in this week’s Commercial Real Estate Special Report, roughly 13,000 residential units could be built over the next decade in Orange County.
The projects also propose to add or preserve roughly 6 million square feet of retail; the shopping centers previously totaled nearly 8 million square feet.
“It’s time to redevelop, intensify the uses and utilize sites that have great infrastructure in them,” Shopoff said.
Here’s a look at where those projects stand.
Adjacent to the Segerstrom family’s proposed The Village Santa Ana development (see page 28), and across the street from South Coast Plaza, a 42-acre project in the works from Irvine-based Related California.
The estimated $3 billion mixed-use redevelopment of the 460,000-square-foot Metro Town Square mall, dubbed Related Bristol, proposes 3,750 apartment units built in mid-rise structures; 350,000 square feet of retail, dining and commercial uses; 200 senior housing units; and a 250-room premium hotel.
The project is currently under review, according to the city of Santa Ana website.
The pedestrian-oriented Related Bristol is among the larger mixed-use projects planned in the state for Related California, a unit of N.Y.-based real estate giant Related Companies.
The site, decades ago used as a lima bean and sugar beets farm, is overseen by three arms of the Callens family who will retain ownership of the land following the Related-overseen redevelopment.
While the 350,000 square feet of retail space proposed for Related Bristol is less than what exists at the center now, given the current vacancy issues facing the big-box retailers at the center and the higher-end offerings that will be built, the city should see significantly higher sales tax revenue from the new development, Related Senior Vice President Steven Oh previously told the Business Journal.
Related Bristol is expected to generate $10.7 million for Santa Ana annually, according to the developer.
Santa Ana’s MainPlace Mall has a $500 million redevelopment plan in place which will decrease its overall retail footprint, with phase one currently underway.
Last month, the first apartment complex, Paloma, delivered 309 rental units.
The site, located near the Santa Ana (5) and Garden Grove (22) freeways, will ultimately house 1,900 residential units, a 400-room hotel, 1.4 million square feet of commercial space and up to 750,000 square feet of office space.
Los Angeles-based commercial real estate developer Lowe is heading the apartment projects, and will soon break ground on the second complex at MainPlace Mall totaling 410 units on a 3-acre site.
The apartments are going up on a parking lot near the mall’s Nordstrom store, which shuttered in 2017. A new parking structure with 585 spaces is included as part of the first multifamily phase.
The former Nordstrom site will house additional uses as part of the redevelopment’s first phase, including dining, community hubs and event spaces.
“Together with Lowe, we have embarked on a journey to creatively reimagine MainPlace, transforming it into a vibrant live-work-play community that will enhance the lives of area residents and provide much-needed luxury apartment living for the city of Santa Ana,” MainPlace General Manager Cory Sams said in a statement.
The Market Place
Irvine Co. began demolition work in July for a project that will add 1,261 residential units located on a part of the 79-acre Irvine portion of The Market Place center.
The Newport Beach-based developer expects the first round of residents to move in by mid-2025.
Big-box retailers Hobby Lobby and Barnes & Noble, which were considered underutilized in the area, moved out and were torn down along with other vacant units to make room for the residential facility.
A 24 Hour Fitness center also relocated to the center’s former Bed Bath & Beyond spot.
The housing units will replace roughly 200,000 square feet of retail space at the center between Bryan Avenue and El Camino Real.
Irvine Co. officials expect the addition of housing will help boost spending at nearby retailers, generating approximately $30 million in annual spending in and around The Market Place.
The mall has 138 stores as of October and taxable sales of $636 million for 12 months ended June 30. It is Orange County’s fourth-largest center, according to Business Journal data.
Village at Laguna Hills
Merlone Geier Partners is behind the long-awaited rebuild of the former Laguna Hills Mall, with new approvals to develop retail, a hotel, 1,500 apartments and possibly offices under the Village at Laguna Hills name.
The retail investor remains in the mapping phase with no news on when horizontal plans will be finalized.
It has demolished the city’s 870,000-square-foot mall and plans to build a new mixed-use entertainment complex in the coming years.
The 68-acre Village at Laguna Hills is approved to include up to 250,000 square feet of retail, up to 465,000 square feet of office space in four buildings, a hotel with as many as 150 rooms, and about 1,500 apartments in five different complexes, including 200 units of affordable housing. A 2.5-acre park is planned to sit at the center of the development.
The project will be built in phases, with city expectations that it will be completed over the next two decades. Overall, the cost of construction for the project is estimated at north of $600 million, according to city records.
City filings indicate the first phase will see the construction of a 100- to 150-room hotel, a 2.6-acre park, retail buildings totaling at least 140,000 square feet and at least two apartment complexes, which the firm hopes to complete in the next three to five years.
Village at Buena Park
San Diego-based developer Merlone Geier Partners is looking to invest $650 million in an overhaul of Buena Park’s largest mall, with plans to build 1,302 homes to the 1.1 million-square-foot shopping center.
The firm is currently in the permitting phase for building demolition and sitework next to the Buena Park Downtown Mall under the Village at Buena Park name. Proposals were approved in June and construction at the site, just off the San Diego (5) Freeway, is anticipated to begin in summer 2024.
The Buena Park project involves the turnaround of another Sears site, spanning 25 acres, into a mixed-use center. The store shuttered in early 2020.
Merlone Geier expects the addition of the housing development to add 2,800 residents to the site.
Buena Park’s Regional Housing Needs Allocation (RHNA) mandates the city build north of 8,000 units between 2021 and 2029 and this project is expected to be “the largest contribution to that requirement,” Managing Director Jamas Gwilliam told the Business Journal in June.
Housing will include 1,176 apartment units and 126 three-story townhomes. Also planned for the project is a 1-acre public park, 3.5 acres of open space with walking paths and a large surface parking lot to be shared with the mall.
Simon Property Group plans to redevelop a portion of the 74-acre Brea Mall into new spaces for additional retail and dining options, as well as a new seven-story residential building.
The property is Simon’s largest center in Orange County.
The enclosed mall currently holds around 1.3 million square feet of gross leasable retail space with a 170-store count. The multimillion-dollar redevelopment project could potentially add around 47,000 square feet of new space for both commercial and residential use, according to city filings.
The plans cover approximately 15.5 acres on the southwest side of the current site, according to filings, which includes the former Sears location. “Fences went up in late summer” and demolition of the Sears parcel and neighboring structures is currently underway, according to Simon.
The project seeks to add more space to the existing center with no plans to tear down or change the current tenants and their spaces.
A notable feature of the new development is a 119,000-square-foot outdoor plaza that will be at the center of the additional retailers and restaurants at the mall.
The residential component will offer 380 new apartments with parking planned for beneath the facility. To round out the “lifestyle” aspect at the mall, a new Life Time Fitness center is also in the works.
There is no set date for completion, but Simon officials point to the multiyear project as an opportunity to build excitement for consumers. This marks the largest expansion of the property since opening in 1977.
New stores and dining will open in phases as parts of construction are completed. The mall owner aims to finish the first set of new offerings in the next one and a half to two years.
The brands that have been announced and will most likely be the first to open in the newly built spaces include Philz Coffee, Din Tai Fung, Zara and more.
“This is now another chapter in our story of being able to consistently add new brands to the center and provide our shoppers with an environment to extend their stay,” Director of Marketing Nate Weirback told the Business Journal.
The Village Santa Ana
The mixed-use revamp of a Santa Ana shopping center marks the Segerstrom family’s largest development plans in years.
The project, The Village Santa Ana, will transform South Coast Plaza Village into a hub of 1,583 residential units, up to 300,000 square feet of office and 80,000 square feet of retail.
The site is adjacent to South Coast Plaza, the country’s largest luxury shopping center with $2.5 billion in taxable sales for 12 months ended June 30, which C.J. Segerstrom & Sons runs along with some of Costa Mesa’s most valuable commercial properties.
The Village development when complete could approach $1.5 billion in value, the Business Journal estimates.
Renderings of the project indicate a mix of low-rise, mid-rise and high-rise buildings are under consideration for the project.
The site will be heavily pedestrian-oriented, furthering the city’s vision to “transform conventional auto-oriented shopping plazas into dynamic nodes of activity that blend healthy living, working, shopping and dining in a contemporary village environment,” filings indicate.
Hines is heading development for the project on behalf of the Segerstrom family, according to August filings with the city of Santa Ana.
The Village, if approved, is expected to be delivered in phases over the next two decades.