Top Shopping Centers Still Reeling In the Tenants
Normally, plunging retail sales and a staggering economy might make potential merchants think twice about opening new locations.
But shopping center developers say retailers are still bullish on expansion.
“The ’A’ centers are still getting the tenants—the Starbucks, the Kohl’s,” said Mark Baziak, associate vice president at Grubb & Ellis in Newport Beach, Calif. “You just may have one or two lined up for space compared to [it being] three or four deep.”
Indeed, a wave of new shopping centers are opening up in California, undaunted by the country’s recent turn of events and seeking to serve store-starved communities.
Baziak is managing the leasing at southern Orange County’s Promenade at San Clemente, a new 700,000-square-foot retail center under joint development by Newport Beach-based SDC Partners Ltd. and Craig Realty Group. Bordered by Interstate 5, the 50-acre site, which was scaled back from 60 acres to meet with Coastal Commission approval, will house a theater complex, apparel and specialty stores, and restaurants about one mile from the Pacific Ocean. The Lusk Co. also will build around 400 luxury homes facing the ocean at the site.
“This is among the fastest-growing areas in Orange County, and typically, residents don’t have many options here for eating and shopping,” Baziak said. “They usually have to leave to the Shops at Mission Viejo, which is five miles north of here, which means they spend money elsewhere. This project will provide the city of San Clemente with half of its tax dollars.”
Pending final commission approval later this year, the $80 million project will break ground early next year and open in the first half of 2003. A new freeway offramp called Vista Hermosa will service the north end of the Promenade, Baziak said.
About two hours north, Phoenix-based Vestar Co. is creating a 630,000-square-foot open-air shopping center in the city of Pico Rivera. Called Pico Rivera Towne Center, the $70 million project already has sealed deals with anchors Wal-Mart, Lowe’s Home Improvement, Ross Dress for Less, Marshalls and Staples. Smaller tenants that have signed on include Payless ShoeSource, Bath & Body Works and Foot Action.
“Our tenants are very excited because there isn’t anything in the area,” said Jeff Axtell, project director in Vestar’s Long Beach, Calif., office.
Axtell said the center, which opens in Spring 2002, will benefit from the adjacent 2-million-square-foot office park under construction by Irvine, Calif.-based Sares-Regis Group. Both developments sit on a former manufacturing facility for Northrop Grumman Corp.
In Northern California, developer Wattson Breevast has scheduled a Spring 2002 groundbreaking for the new Shops at Tanforan in San Bruno, approximately 20 miles south of San Francisco. The $105 million redevelopment project will transform the existing 30-year-old Tanforan Shopping Center into a 1.1 million-square-foot upscale mall with up to 150 stores and a combination of 14 restaurants and quick-service eateries.
Current tenants Sears, J.C. Penney and Target will remain open throughout the construction phase. So far, there have been letters of interest from national bookstores, women’s boutiques and children’s clothing stores, according to Greg Wattson, company senior vice president.
“There have been few opportunities to build on the Peninsula, so our project has been well-received by prospective tenants,” Wattson said.
Targeting a Fall 2003 opening, the Shops at Tanforan will serve more than 900,000 residents within a 10-mile radius. —Nola Sarkisian-Miller
