A shopping center portfolio in one of the country’s wealthiest suburban markets has sold for $357 million as investors double down on grocery-anchored complexes that cater to daily needs.
Regency Centers, one of the nation’s largest shopping center owners, has acquired five retail properties totaling 630,000 square feet in Rancho Mission Viejo, a fast-growing master-planned community in southern Orange County. The deal includes the fast-casual food-anchored Bridgepark Plaza, the HomeGoods, Trader Joe's and Five Below-anchored power centers Mercantile East and West, the salon and spa-filled Terrace Shops and Sendero Marketplace, a Gelson's-anchored neighborhood center.
"This is a blockbuster deal and the largest pure retail trade in Orange County's history," said Jesse Gundersheim, CoStar senior director of market analytics. "It allows Regency to capitalize on a thriving, affluent demographic."
The deal is a sign that well-located centers anchored by daily-needs tenants remain in demand even as broader retail leasing softens. U.S. retail tenants have given back more space than they leased in the two most recent quarters, though leasing velocity and rent growth have held up in hard-to-penetrate areas like Orange County, according to CoStar data.
“The addition of this portfolio enhances our position within one of the most supply-constrained coastal markets in the U.S.," John Mehigan, Regency’s senior vice president of investments in the West, said in a statement.
The Jacksonville, Florida–based real estate investment trust already has a robust Southern California portfolio with 12 properties in Orange County, 24 in Los Angeles and 10 in San Diego. The Rancho Mission Viejo properties fit the company's acquisition profile with grocer sales in the portfolio that average nearly $800 per square foot, and average household income within a three-mile radius that tops $200,000, according to Regency.
Servicing the suburbs
The seller, Newport Beach–based Westar Associates, has long played a key role in the development of Rancho Mission Viejo’s commercial core. The retail developer has served as the preferred operator for the O’Neill family, the original landowners behind the 23,000-acre ranch, and the family's development arm, Rancho Mission Viejo LLC.
Westar partnered with the O’Neill family to plan and deliver grocery-anchored shopping hubs that serve the growing number of homes in the community, with roughly 5,000 residences built to date.
As it reviewed offers for the portfolio, Westar was drawn to the flexibility of Regency’s UPREIT structure, which allowed the deal to be structured using a mix of tax-efficient operating partnership, or OP units, assumed debt and limited cash.
Instead of taking the full sale proceeds in cash, Westar accepted a portion in OP units that can appreciate and eventually be converted into publicly traded REIT shares. That structure enables original investors to defer capital gains taxes and retain upside tied to future performance.
In June, Rancho Mission Viejo announced plans to add nearly 200 more all-age homes, on top of 300 age-restricted residences expected in early 2026. Since opening its first village in 2013, the community has grown toward a planned 14,000 homes.
Master-planned communities like Rancho Mission Viejo are attracting more homebuyers amid tight supply and high prices in coastal metros. A January 2024 report from John Burns Research and Consulting found that new home sales in master-planned communities were significantly above historical averages last year, a trend continuing into 2025.
Strong fundamentals
Orange County’s retail market remains among the tightest in the country. As of the third quarter of 2025, retail availability is just 4.1%, down from 4.3% earlier in the year and well below the national average of 4.9%, according to CoStar data. Prime corridors near Rancho Mission Viejo and neighboring Ladera Ranch are near full occupancy, Gunderheim said.
“There are a few vacancies to fill in the portfolio, but there are still a lot of retailers seeking space,” Gundersheim said. “The new owners could conceivably land new tenants within a year. Retail space in South Orange County has only been available at a median of nine months before getting leased this year.”
On the transaction side, the Orange County retail market is slowly rebounding from a 12-year low in 2024. Second-quarter 2025 sales volume exceeded $275 million, outpacing the same period last year. Private capital still accounts for the majority of acquisitions, but institutional and REIT buyers remain active in high-barrier markets, according to CoStar data.
Notable recent deals include Terreno Realty Corp.’s $49.5 million acquisition of a 134,000-square-foot Home Depot-leased property in Santa Ana, and Space Investment Partners’ $118.5 million purchase of Fullerton Metrocenter from Kite Realty. The 30-acre center is anchored by Sprouts Farmers Market and Target.
Regency’s acquisition comes as discount apparel chains, fitness concepts, experiential tenants, and medical services drive leasing in Orange County. Median lease-up time has returned to pre-pandemic norms and nearly all new development has been absorbed, according to CoStar data.
Nationally, retail property investors are navigating a bifurcated landscape. Closures and bankruptcies have weighed on overall demand, yet prime space like that in Rancho Mission Viejo remains in short supply. Leasing is increasingly dominated by smaller, service‑oriented tenants, while available space skews older and lower quality, intensifying competition for newer properties in affluent neighborhoods, according to CoStar data.
For the record
BofA Securities served as financial advisor and EY served as tax advisor to the seller. The seller was advised on legal matters by Latham & Watkins. Regency Centers was advised on legal matters by Paul Hastings.