Another retail property has come on the market in Orange County, this time in the town of Mission Viejo. The 24,318 square foot retail asset is located on just over 2.7 acres of land at 25272 Marguerite Parkway. The selling price is $12.8 million or approximately $527 per square foot.
The marketing of the property is led by IREA’s Senior Partner Chris Thompson and Partner David Leibowitz.
The building was originally constructed in 1975, but underwent renovations as late as 2023. The marketing materials state that the property has been fully occupied by CVS Pharmacy since 2006 and the current lease agreement has just over eight years remaining, with the end date at the beginning of 2032. The current lease agreement also includes 10 five-year renewal options, all at fair market value, providing the new owner with the probability of income upside and inflation protection in the future.
The marketing flier also states that the current cap rate is four percent and the net operating income is $512,571 per year. The 24-hour store has a larger footprint than a typical CVS, with approximately 10,000 additional square feet that includes a CVS Health Hub, Wellness Room and Minute Clinic. Other neighbors at the center and in the area include Trader Joes, Panda Express, Carl’s Jr., California Pizza Kitchen, Panera Bread, Chipotle, Walgreens and many more. The City of Mission Viejo also has its offices across the street and is planning further enhancement of the shopping center.
The retail asset is located in the heart of Mission Viejo, close to the interaction of La Paz Road and Marguerite Parkway. The property is easily accessible from US Interstate Highway 5.
The offer for sale comes on the back of a similar property hitting the market in the neighboring town of Aliso Viejo. The Registry recently reported that a 24,986 square foot collection of retail outlets comprising several shops located on 2.04 acres of land at 26711 Aliso Creek Road were on the market. The sale price is $10.39 million, or approximately $416 per square foot.
In the third quarter of 2023, the Orange County retail market indicated an upward trend in rental rates and vacancy, alongside a decrease in construction deliveries. Cushman & Wakefield’s Orange County Retail MarketBeat report for this period highlights that while the vacancy rate remained stable at 3.9 percent compared to the previous quarter, it did experience a 30 basis points increase from the same time last year. Although slightly below the five-year quarterly average of four percent, the vacancy rate aligns closely with longer-term averages and has decreased by 70 basis points from its peak rate of 4.6 percent recorded in early 2021.
The report concluded that one positive element has emerged in the consistent growth of the overall average asking rent over the past five quarters. The average asking rate, currently at $2.57 per square foot per month, experienced a 1.6 percent increase from the previous quarter and a 5.8 percent surge compared to the same time last year.
