A commercial real estate buying spree by Orange County’s Gary Jabara has expanded into San Diego, with a pair of acquisitions—a recently built high-end apartment tower in the city’s downtown, and a prominent shopping center in Del Mar—totaling nearly $270 million, the Business Journal has learned.
The two deals push Jabara’s real estate acquisitions well past $600 million since last October’s sale of Newport Beach’s Mobilitie, the telecommunications infrastructure company he founded and chaired, and then sold in a deal reports pegged around $1.7 billion.
More acquisitions are expected, says Jabara, one of the most prominent telecom execs in Orange County. He now serves as chairman of the locally based ioXt Alliance, which was founded in 2018 and is handling the rapidly increasing demand for Internet of Things device security certification.
Following the sale of Mobilitie, Jabara—whose wealth the Business Journal estimates to be in excess of $1 billion—said he planned to put most of his proceeds in high-end commercial real estate, which he runs under the Boardwalk Investments Group Inc. name.
“We’re always looking—from San Diego to Orange County to Napa,” he told the Business Journal this month.
In the largest and most recent of the buys, Jabara paid about $200 million for Flower Hill Promenade, a 165,000-square-foot open air center in the town of Del Mar just off Interstate 5.
The North County property, anchored by a Whole Foods and with a 400-unit parking structure, is across the freeway from the famed Del Mar Racetrack and the grounds of the San Diego County Fair.
Jabara touted Flower Hill’s mix of boutique shops, restaurants, and larger tenants, its location next to the freeway and the high-end demographics of the seaside area as the reasons he bought the property.
“It’s the greatest shopping center in all of San Diego,” Jabara said.
He paid nearly $1,200 per square foot for the property, which was previously owned for about two decades by an affiliate of San Diego’s Protea Properties. On both a total price, and per-square-foot price, the all-cash deal is among the larger retail sales seen in Southern California since the onset of the pandemic.
“I really like the [retail] real estate space post-COVID,” said Jabara, whose other big shopping center assets include the grocery-anchored Landing in Newport Beach, the Strand along Coast Highway in Huntington Beach, and Aliso Creek Shopping Center, which is across the street from the Montage Laguna Beach resort.
As in the case of those OC holdings, the Flower Hill Promenade is “a trophy, where you can see the ocean from the property,” Jabara said, adding that these markets are “so reliable.”
Flower Hill, which about a decade ago got a reported $30 million upgrade that included the addition of the Whole Foods, could soon be in line for more development.
The site has excess land where “a couple hundred units” of residential development could be added, Jabara said.
Such an addition would cost another $100 million or so, he said.
Little Italy Luxe
An existing rental property in downtown San Diego is the other big addition to Jabara’s portfolio.
Near the start of the year, he paid close to $70 million for 1810 State St., an eight-story rental property that opened a few years ago in San Diego’s Little Italy neighborhood.
The 99-unit complex was sold by locally based McMillen for around $650,000 a unit, also in an all-cash deal. A sale was disclosed near the start of 2022 but Jabara wasn’t identified as the buyer at the time.
Apartments at the complex average about 720 square feet, and currently have monthly rents running from around $3,000 to $4,500.
The two deals mark the first commercial real estate investments in San Diego for Jabara, a graduate of San Diego State University who, after a big payout for a portfolio of cellphone towers he owned about a decade ago, was previously in the running to buy the city’s Padres baseball team.
He says he’s no longer interested in sports ownership, with IoXt Alliance, real estate and other business opportunities taking his time these days.
The real estate buys “are much more passive investments” than sports franchises like the Padres, he said. “Things happen for a reason.”
Elsewhere in the state, Jabara said renovations are underway at the The Estate Yountville, a 22-acre “village-within-a-village” collection of upscale hotels, restaurants, wedding facilities, shops, meeting space, a vineyard and other facilities that he bought late last year in in the heart of wine country.
Reports and brokerage data indicates Jabara paid close to $360 million for the Estate, which he calls “the gem of Napa Valley.”
– Mark Mueller is editor-in-chief of the Orange County Business Journal.
Boardwalk Investments Group
CHAIRMAN: Gary Jabara
HEADQUARTERS: Costa Mesa
BUSINESS: Real estate
NOTABLE: Firm’s “curated” commercial real estate portfolio focuses on “core, coastal markets.”