Publish Date: May 04, 2017
The Lido Marina Village retail center, in Newport Beach, Calif., is set to regain the style and flair it had some 45 years ago. Owner DJM Capital Partners, of San Jose, is finishing up redevelopment of this 116,000-square-foot shopping center just off the Pacific Coast Highway, on an inlet to the Pacific Ocean. The center, which opened in 1971, had become quite the hot spot by the mid-1970s, after Burt Hixson, an award-winning Hollywood cameraman turned restaurateur, opened The Warehouse there. But by the late 1990s, the property had lost quite a bit of that starshine. “This was a property that had seen its glory days go by,” said D. John Miller, DJM Capital’s CEO. “It had deep history with the community, but it was a gem, basically, that had been let go.”
DJM Capital acquired Lido Marina Village from Vornado in May 2013. The redeveloped center held a soft opening last November with the mayor and other city officials in attendance and is to celebrate its official opening this summer.
“We recognized we could deliver a rejuvenated, chic, rustic project that would cater to the community,” said Miller. Realizing that vision, though, took longer than Miller had anticipated, because of the property’s heritage. “These are really hard properties to get right,” he said. “You have to be patient, and they are really expensive, so you have to have patient capital.”
Selling potential luxury retailers on the finished product took some effort. “To gain leasing traction, we had to prove to the market that we were definitely going to radically change and improve the property,” said Miller. “But it’s really hard to lease space when the space hasn’t been touched for 30 years. It’s really hard for a lot of these tenants to get the vision, but we slowly over time showed them the potential for this beautiful, rustic and authentic space.”
Today the center is about 90 percent occupied, with mostly local tenants, including home decor and housewares store Serena & Lily and French fare bistro Zinqué. “Most of our tenants are privately owned, one or two stores in the Southern California marketplace, for the most part, and that’s their passion, that’s their focus, that’s where they have their capital, and that’s where their success is,” said Miller. “Sales at the property are just off the charts.”
The addition of Japanese restaurant chain Nobu, a concept of star chef Nobuyuki Matsuhisa, proved to be the catalyst for the project’s leasing success, says Miller. “They had the vision, and they got it immediately,” he said. “The driver today in these centers is food — food is definitely the new fashion. As a consequence of the Nobu deal, that probably accelerated our whole leasing program.”
Including Nobu’s 12,000-square-foot site, the project consists of about 30,000 square feet of food-related space — roughly 25 percent of the total gross leasable area. “When you see how you can take a dilapidated old building and be standing on the second floor of Nobu and looking at the atmosphere and the energy that Nobu created, it’s extraordinarily exciting to be a part of bringing something back to life in such a glorious way,” said Miller.
The project’s second phase will see the rebuilding of the marina over the next two years. For now Miller is excited to see the Lido back in business. “It took us two years longer than we thought, and we spent many, many millions more than we anticipated, but we’ve delivered an extraordinary asset,” said Miller. “You only have one shot at a first impression, and we figured we better be patient to get it right, and so we spent probably a year more than most developers to get it right. You’ve got these prized assets and you just don’t want to compromise.”