The iconic Balboa Fun Zone in Newport Beach is up for sale.
Located in Balboa Village on the Balboa Peninsula at 600 E. Bay Ave., the nearly century old Fun Zone draws more than three million visitors annually.
Owner of the property, The Discovery Cube, retained Cushman & Wakefield to execute the sale of the Property on a strict “as is/where is” basis, followed by the relocation of the owner-occupied areas from the property.
Financial impacts caused by the COVID-19 pandemic are reportedly the reason for the sale. Due to coronavirus restrictions in California, the Fun Zone was closed for most of 2020.
Officials announced in December that they were looking to sell, but the mixed-use oceanfront property was just listed on Feb. 15.
Home to a number of restaurants, retail, other commercial business, and an ocean-focused museum, the Fun Zone offers approximately 34,412 square feet of waterfront space.
The property includes 212 feet of waterfrontage on Newport Harbor, 21,400± square feet of water area, 16,666 square feet of mixed-use improvements, 58 stall subterranean parking garage, and Boardwalk (Edgewater Place) featuring the Balboa Ferris Wheel and Fun Zone attractions.
There is no price listed on the website created for the sale.
“Deal terms are not currently defined. Request your own specific terms when submitting a non-binding offer,” the site reads.
The pricing is dependent on the development type, Cushman & Wakefield Associate Matthew Godman explained in an email to What Now Los Angeles on Wednesday. The company have offers from hospitality, retail, mixed use developers and creative value add players.
It’s a fee simple and includes the land and marina area.
This property is unique due to the $26,000 per month, or $320,810 annually, from the Marina which should be on-going even when going through entitlements and construction, Godman explained.
The retail provides $183,240 annually and the current in-place net operating income (NOI) is around $400,000 to $504,000. A stabilized, as-is, NOI runs around $1.05 million, with lease up and renovations it is closer to $1.62 million and if you demo and take advantage or the height and real estate a stabilized NOI is closer to $3.58 million or more.
There is a 31-foot height restriction which the company based the proformas on, but the city might increase this to match surrounding assets’ heights.
They hope to have most offers in, or in negotiations, by March 10.
The new buyer will most likely be keeping some Fun Zone components to appease the local community and historical aspects.
It’s a “true once-in-a-generation investment opportunity,” Cushman & Wakefield officials wrote on the website.
The Balboa Fun Zone is one of Southern California’s oldest and last great coastal amusement areas and hasn’t been actively for sale for decades.
Near the turn of the century, the area was a boat yard. In the 1930s, the space was purchased and quickly turned into an entertainment venue. The iconic Ferris wheel was added soon after. It went through a few owners over the years, including NHNM Property Holdings, LLC, in 2005.
The Balboa Island Ferry has been transporting passengers (pedestrians, bicyclists, and vehicles) across Newport Harbor between the island and the dock where the Fun Zone now stands since 1919.
The Discovery Cube took over in 2016, when the science center merged with ExplorOcean, an ocean focused educational nonprofit located on the waterfront property (later renamed Ocean Quest). The Discovery Cube fully acquired the land the following year.
The aim was to “be Discovery Cube, but on the water,” Discovery Cube CEO Joe Adams said at a 2018 Newport Beach Chamber of Commerce Marine Committee meeting.
The move was a part of the Discovery Science Foundation’s regional plan to expand ocean science-based learning and education to more of Southern California, while also investing in an area with a storied history and special maritime legacy. As a part of the merger, Discovery Cube planned to immediately invest in restoring the Balboa Fun Zone.
