Centers See Trend Slowing but Holding This Year
Orange County’s largest shopping centers grew sales 9% last year to $4.8 billion, outpacing the state’s overall 7% retail sales growth in 1999, according to this week’s Business Journal list.
Local malls got a boost from strong consumer spending and expansion at several sites. The total space available at OC’s biggest shopping centers last year was 20.4 million square feet, up 4% from 19.6 million square feet at the largest centers on last year’s list.
The addition of No. 13 The Block at Orange helped OC centers outpace the state’s retail sales growth rate. The Block, which opened in late 1998 and counted $125 million in 1999 sales, knocked off Plaza De La Paz in Laguna Niguel from this year’s list.
The list ranks the 25 largest OC shopping centers by 1999 taxable sales. The sales figure for one center, No. 5 Main Place/Santa Ana, is a Business Journal estimate. Owner Urban Shopping Centers Inc. of Chicago declined to comment for this story or to provide figures for the list.
For comparison purposes, the Main Place estimate is calculated as unchanged from a year ago, as it has faced new, nearby competition from The Block, which includes 811,000 square feet of space featuring 127 tenants including Vans Skate Park, AMC 30 and Ron Jon Surf Shop.
Excluding The Block from the mix, the 24 other centers saw sales grow 6% vs. those at the 24 largest centers a year ago, in line with state’s overall growth rate. With continued expansion and a slower but still strong economy, mall operators and analysts expect another year of growth in 2000.
The county’s perennial No. 1 shopping center is South Coast Plaza in Costa Mesa, with sales up 4% last year to $990.5 million. With nearly 3 million square feet of retail space, the mammoth mall is more than double the size of four of the next five centers on the list.
South Coast Plaza, which is owned by C.J. Segerstrom & Sons, is about to complete a $100 million transformation that includes linking together the former Crystal Court section on Bear Street to the main mall via a 600-foot pedestrian bridge. The bridge itself will feature two restaurants, California Pizza Kitchen ASAP and Pascal Caf & #233;.
New South Coast Plaza tenants that opened up shop last year include Crate & Barrel and Borders Books Music and Caf & #233;. This year, more than a dozen new stores or newly remodeled stores are set to open, including a 189,000-square-foot Macy’s Home, an 11,622-square-foot Eddie Bauer store, a Banana Republic flagship store, Ann Taylor Loft, Pottery Barn Kids and agnes b.
At No. 2 Fashion Island in Newport Beach, whose anchor tenants include upscale department stores Neiman Marcus and Bloomingdale’s, sales grew 11% last year to $490 million. It’s the county’s fourth-largest center by space with 1.25 million square feet.
The center, owned by The Irvine Co., has added five new retail stores this year: Quiksilver Youth and Pacific Sunwear, both youth-oriented surfwear stores, Mayor’s Jewelers, Build-A-Bear Workshop and Mary Englebreit, a stationery store.
Brea Mall, one of four malls on the list owned by Indianapolis-based Simon Property Group, ranks third with 1999 sales of $394.5 million, which were up 4%. The mall’s overall square footage grew 11% while the number of stores dropped 4% to 175.
Combined, owners the Irvine Co., Simon and C.J. Segerstrom & Sons account for $3 billion in 1999 OC shopping center sales, or more than 60% of the revenue at the centers on this year’s list.
The county’s top eight shopping centers all held their rankings, while the newly renovated Shops at Mission Viejo was the biggest mover as it leaped four notches to the No. 9 spot with sales of $168.4 million, a 61% increase.
The center, owned by Simon Property Group, completed a $150 million makeover last year. The mall, which is anchored by Nordstrom, Robinsons-May and Macy’s, grew 42% to 1.2 million square feet. It added 39 stores for a total of 135, and plans to build a 50,000-square-foot food court and two restaurants,P.F. Chang’s China Bistro and California Caf & #233; Bar & Grill,this year.
The Shops was just one of 19 malls that reported sales gains last year. The top performers by percentage: No. 22, the Westminster Center, up 31% to $73.1 million, No. 10, the Mall of Orange, up 24% to $161.2 million and Irvine Spectrum Center, up 24% to $88 million.
By dollar value, The Market Place Tustin/Irvine is tops, adding $51 million in new sales last year, a 16% increase to $371 million. The center, on the border of Irvine and Tustin, added 35% more space for a total of 1.6 million square feet and 10 new stores for a total of 100.
Sales growth at the Westminster Center was due to the addition of nearly 18,000 square feet and the opening of five new stores: the AutoZone, an automotive accessories store; Starbucks Coffee, Hollywood Video, Westminster Veterinary Center and PETCO, according to Jeanne Wilson, asset manager for Burnham Pacific Properties.
Mall of Orange, which lost the Broadway in 1997, has nevertheless been on a roll ever since.
The 822,000-square-foot center added Wal-Mart in January 1998 plus several other anchor tenants and smaller retailers. The mall saw an 83% spike in 1998 and a 24% boost last year. Among the top producers were Trader Joe’s, Todai Restaurant, Fashion Q, Ross Dress For Less and the Wine Exchange, according to General Manager Karie Najemnik.
“It’s been a curb-to-curb regeneration,” she said adding that the mall has remained 100% leased since 1998 and sales per square foot for comparable stores is up $100 to about $300.
Several centers also moved down the list this year.
Buena Park Mall dropped 7% last year to $74 million in 1999 sales, falling three notches to No. 21 on the list due to construction. The mall, which is undergoing a four-year, $40 million renovation project that includes adding 300,000 square feet, is set to complete the first phase in October, said Lori Jones, director of leasing, Festival Management Corp.
Although sales were down last year, the mall’s sales are up 35% year-to-date and the trend is expected to continue for the remainder of the year, Jones said.
Some of the more recent additions are Ross Dress For Less, which opened a new 30,000-square-foot store in July 1999, and Burlington Coat Factory, which opened in March.
Also, the mall has several new stores coming, including Bed Bath and Beyond and Old Navy, which both open in September and add 54,000 square feet.
But JC Penny, one of the mall’s three anchor stores, was named earlier this year as one of 38 units earmarked for closure by the chain in August. The mall is in negotiations for a new tenant to be announced.
Other decliners include Pavilion’s Square in Westminster, down 4% to $55.9 million at No. 24, and Fullerton Metro Center, down 5% to $48.4 million, though it remained in the No. 25 spot.
Moving off the list was Plaza De La Paz in Laguna Niguel, which placed No. 23 last year at $55 million. The 293,540-square-foot center, which is anchored by HomeBase and Longs Drug, lost a third anchor, TJ Maxx, in August. n