IRVINE, Calif. – Faris Lee Investments, the nation’s largest retail-specialized investment advisory firm, has completed a complex joint venture partnership between New York-based American Realty Capital (ARC) and Irvine, Calif.-based ValueRock Realty Partners, Inc. for the ownership of The Commons at Aliso Viejo Town Center. Built in 2004 and situated on 14.54 acres, the 181,160-square-foot multi-tenant retail center is fully occupied by Lowe’s, Michaels, and Tuesday Morning in the southern Orange County city of Aliso Viejo.
Faris Lee originally listed The Commons with owner CapLease, Inc. in mid-2013 and generated multiple offers, none of which were acceptable to the seller. During its review of options for the owner, Faris Lee identified some of the challenges CapLease was undergoing as an East Coast owner of a West Coast asset. The firm introduced CapLease to ValueRock as a potential joint venture partner alternative to selling the property. During the negotiations for the new ownership structure, CapLease was acquired by ARC, a full-service real estate advisory firm.
“This joint venture structure was strategic, uniquely complex, and born out of a disciplined review and approach to maximizing the value of the asset, on both financial and operational levels to meet the ownership’s goals and objectives,” said Richard Chichester, president and CEO of Faris Lee Investments. “To that end, we explored and developed multiple scenarios including sale, recapitalization, and partnership, and determined that with the right operating partner, the long-term value would be best maximized through a joint venture.”
Dennis Vaccaro, senior managing director with Faris Lee added: “Both CapLease and ARC are New York-based companies. We were able to match ARC with ValueRock, an experienced, locally-based operator and manager with other proven success operating south Orange County retail properties.”
Under this new joint venture structure, ValueRock will be taking the lead on operations and lease negotiations, and will consider future strategies to reposition the asset in order to maximize value through tenancy.
“We are pleased to partner with ARC and look forward to working with them to add value to the property through proactive management and leasing,” said William Winn, president & CEO at ValueRock Realty Partners, Inc. “This property offers an intrinsic value in a key market that has limited potential for future development.”
Valued at approximately $50 million, The Commons is situated on 14.54 acres at 26501, 26053 and 26505 Aliso Creek Rd. and is located within Aliso Viejo Town Center, a 300-acre, 700,000-square-foot regional shopping center and one of the most dominant retail developments in Orange County. The center includes a 20-screen Edward’s Stadium Theatre, Ralphs Fresh Fare, Trader Joe’s, TJ Maxx, PetSmart, Barnes & Noble, Pier 1 Imports, and others. Aliso Viejo Town Center dominates the area, while also drawing from the surrounding communities of Laguna Niguel, Laguna Hills, Mission Viejo, Lake Forest and Laguna Beach.
Faris Lee has emerged as an expert investment advisor in the south Orange County region and is the most active retail sales firm in the area participating in nearly $1 billion in property transactions over the past 15 years. In Aliso Viejo alone, the firm has completed in excess of $100 million in retail property transactions including the $39 million sale of The Shoppes at Aliso Viejo; a multi-tenant property including Stadium Brewing Company; and a single-tenant Walgreens property. The firm is also currently marketing a PetSmart property valued at $8.75 million.
The Commons at Aliso Viejo is located in south Orange County, one of the most affluent regions in Southern California with the average annual household income of more than $119,000 within a five-mile radius. The Commons at Aliso Viejo is part of the successful Aliso Viejo master-planning community. The city’s plan strictly limits commercial development, preventing any future overdevelopment in the area. Furthermore, the Aliso Viejo Town Center was designed and developed to be the primary shopping destination for the residents of Aliso Viejo and surrounding communities, offering big-box, grocery, lifestyle, entertainment, restaurant, and shop space in one convenient location.