The Midas Touch
Anyone who builds in California—be it homes, hotels or retail stores—knows it’s a tough place to do business. The permitting process is rigorous, land acquisition is more competitive than perhaps anywhere else in the nation and construction costs are sky high. Yet the obstacles are hardly stopping retailers and developers from expanding the state’s retail offerings.
Big-box retailers are perhaps the state’s most aggressive expanders. Of Best Buy’s 800-plus units, the largest amount of retail square footage is in California. The same is true of Bed Bath & Beyond. And, though Lowe’s home improvement warehouse is a Southeastern company, with the bulk of its stores along the Eastern seaboard, its Western openings in 2007 are exceeded only by its growth in the Northeast. In fact, for the Mooresville, N.C.-based, 1,400-store retailer, California will likely play a major role in its quest to reach and surpass the 2,000-store mark.
Solana Beach Towne CentreLocation: Solana Beach (San Diego), Calif.
Size: 252,000-sq.-ft. community center
Developer: American Assets, Inc.
Major tenants: Henry’s Marketplace, Marshalls, CVS Pharmacy, Dixieline Lumber, and more than 50 shops and restaurants
Status: A three-phase redevelopment of the circa-1970’s center started in 2006; phase 3, which is expected to be completed in 2008, will demolish an existing building and provide the same facelift the rest of the center has received.
In the highly coveted San Diego real estate market, where many desire to be but few have secured a foothold, American Assets has built a successful history with six prime shopping center—including Solana Beach Town Centre, which began a $6 million renovation and re-tenanting effort in 2006. Located in the upscale beachside community of Solana Beach, the center has been serving local residents since the ‘70s, but ownership felt that the facades, landscaping and paint palette could all benefit from an update to keep pace with the surrounding community.
Santa Fe Trail PlazaLocation: El Monte, Calif. (northeast corner of Santa Anita Blvd. and Santa Anita Ave.)
Size: 195,000-sq.-ft.
Developer: The Festival Cos. and joint-venture partner Capri Capital Partners
Major tenants: In lease negotiations with, among others, ready-to wear apparel, children’s apparel, consumer electronics and office supplies retailers, as well as casual, family-style and sit-down restaurant venues
Status: The project will break ground in spring 2008 and is scheduled to open spring 2009.
Located in a densely populated area in the hub of the San Gabriel Valley, Santa Fe Trail Plaza offers an ideal location in a strong market. Featuring great design, Santa Barbara mission-style architecture and a dynamic mix of retailers and restaurants, the project will integrate with the existing downtown Valley Mall and become an integral part of the community.
And then there’s Target. With more than 200 stores and 26 million-plus sq. ft. in California, its Golden State presence doubles its number of Florida doors, and more than triples the number of stores in its home state of Minnesota.
That California is the nation’s most-populated state makes it no great surprise that national retailers cluster a high percentage of their store counts there. But many retailers and developers will tell you it’s more than the population that’s a draw; California’s unabated growth, its diverse economy and active Pacific Rim trade largely shelter the state from economic downturn. That, of course, is very attractive to retailers.
“When you have the growth, you have new opportunities,” said Dave Mossman, executive VP of development and acquisitions for Costa Mesa, Calif.-based Donahue Schriber. Much of the company’s California activity, said Mossman, is in Sacramento and the Central Valley—and big-box anchors are driving more power-center development. “The Targets, the Wal-Marts, the home-improvement retailers have increased their California presence and are going to continue to,” said Mossman. “They still have a big appetite.”
The Promenade at Howard Hughes CenterLocation: West Los Angeles, Calif.
Size: 247,833 sq. ft.
Developer: Passco Cos., LLC
Major tenants: Notable tenants include a 17-screen “The Bridge” Theaters, which features a state-of-the-art IMAX theater, stadium seating, reserved-seating options and an upscale lounge and bar. Other tenants include Borders Books & Music and Nordstrom Rack, with the center also boasting an excellent mix of restaurants and specialty food purveyors including Starbucks, Johnny Rockets, Rocky Mountain Chocolate Factory, Ben & Jerry’s, On The Border, Marie Callender’s, Subway, Islands, Rubio’s and Mrs. Fields.
Status: The Promenade is completed and opened in 2001.
Located just off the Interstate 405 freeway, The Promenade at Howard Hughes Center offers tenants many desirable amenities, including safe and monitored parking facilities; lush, beautifully landscaped common areas; modern office buildings; state-of-the-art office spaces with large windows; lobby attendants; and a plethora of coffee shops, restaurants and retail stores.
The Promenade’s open-air plan allows visitors to soak up the California sun while stopping to grab a cup of coffee or a bite to eat. The Promenade is landscaped with beautiful flowers and boasts a host of outdoor eating areas.
The Shoppes at Chino HillsLocation: Chino Hills, Calif.
Size: 370,000 sq. ft. on a 58-acre site
Developer: Opus West Corp., a regional company within The Opus Group, is developing and constructing the project, which was designed by Altoon + Porter.
Major tenants: The Shoppes at Chino Hills has secured several tenants, including Barnes & Noble, Trader Joe’s, Banana Republic, J. Jill, Active Ride/Sport, Coldwater Creek, California Pizza Kitchen, American Eagle and Pinkberry, and is in negotiation with several upscale national retailers.
Status: Construction is under way and the project is slated for completion in May 2008.
The Shoppes at Chino Hills, a 430,000-sq.-ft. lifestyle center, is located in one of the Inland Empire’s most affluent areas. The Shoppes at Chino Hills will feature outdoor shopping along landscaped streets, offering store-adjacent parking and a pedestrian-only promenade with shaded seating and fountains.
The area’s upscale demographics have attracted a strong national tenant roster. “This lifestyle center was designed as a town center to include 50,000 sq. ft. of offices above retail, a 200,000-sq.-ft. Chino Hills Civic Center with police and fire departments, a library and city hall,” said Paul Marshall, division president of Opus West-Southern California. Construction commenced this spring and project completion is slated for next summer.
Donahue Schriber’s Countryside Marketplace in Riverside County is anchored by Target, Lowe’s and Kohl’s. Construction on the 70-acre-plus power center is under way, with a projected fall 2008 completion date. Another project, Orchard Walk in Visalia, Calif., is anchored by Target and The Home Depot and is slated for a spring 2008 or early 2009 opening.
Strategic relationships with California developers have helped Target expedite its West Coast expansion. A deepening relationship with Upland, Calif.-based Lewis Retail Centers has resulted in four Target-anchored c