The Orange County retail market has seen a steady increase in sales activity over the past few months, with close to $331 million in total sales recorded in the last quarter of 2023. One property that may test the market in the new year is the 29,946 square foot retail space recently leased to UFC Gym on a long-term basis. The property is located on 2020 South Brea Blvd. in Brea and is offered for sale for $11.5 million, or approximately $384 per square foot.
The marketing of the property is led by Hanley Investment Group’s team of Senior Vice President Lee Csenar, Executive Vice President Carlos Lopez and President Ed Hanley. Records show that the property is currently owned by a private family trust.
The two-story retail asset was originally built in 2000 and extensively renovated as late as last year. The marketing materials show the property was fully leased in October 2023 to UFC Gym for a period of 15 years. The reported current annual rental income is $690,000 with the lease expiring in September 2038. There are 10 percent rental increases agreed within the lease that occur every five years. There are also two five-year lease renewal options agreed within the existing lease.
UFC Gym Brea offers a fitness environment complete with a comprehensive range of amenities. The facilities include a fully equipped weight room with free weights and Olympic lift platforms, as well as a variety of cardio and strength training equipment. Additionally, there are dedicated spaces such as a bag rack room, group fitness studio, grappling mat and octagon combat training area. Beyond exercise, members can enjoy the UFC Gym retail store, café and recovery area, equipped with massage facilities, cryotherapy, red light therapy, spray tanning booths, lockers, showers and a sauna. The property is located adjacent to a 476-space free parking structure owned by the City of Brea, with two additional parking structures nearby, offering over 2,000 additional free parking spots.
Located between two of Brea’s retail hubs, UFC GYM Brea enjoys access via Imperial Highway, a key artery serving North Orange County and Birch Street, linking the California State Route 57 and Brea Mall to the gym and Brea Downtown. The area is surrounded by prominent regional shopping destinations, such as Brea Gateway anchored by Ralphs, HomeGoods, Cost Plus World Market and Rite Aid, and Brea Marketplace anchored by Target and Sprouts. Brea Mall includes retailers such as Nordstrom, JCPenney and Macy’s. Brea Downtown is a dining, entertainment and shopping district, with a mix of trendy restaurants, outdoor cafes, shops, boutiques and plazas.
Looking at the overall health of the Orange County retail market, Cushman & Wakefield’s Marketbeat report for Q4 2023 shows the overall vacancy rate saw a quarter-over-quarter decrease of 20 basis points and a 10 basis point drop compared to the previous year. In the last quarter of 2023, the vacancy rate stood 40 basis points lower than the five-year quarterly average of 4.1 percent and declined by 290 basis points from its peak rate of 6.6 percent recorded in early 2010. Across all types of centers, tenants absorbed 224,639 square feet in the fourth quarter of 2023, with occupancy changes varied among different retail centers.
Cushman’s report further shows the Orange County retail market witnessed 13 properties sold during the last quarter of 2023, indicating a 229 percent increase from $101 million in the previous quarter and a 95 percent increase from $169 million in the fourth quarter of 2022. The average price per square foot rose by seven percent quarter-over-quarter to $283 per square foot, which was still 17 percent lower compared to a year ago, leaving potential for further asking price rises in the future.
