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New Tenants, Expansions Boost Malls; Still See Sales Temper

Orange County’s 25 largest shopping centers saw another year of revenue gains, although smaller from previous years. The shopping centers posted a 6% gain in 2006 with $7 billion in revenue, according to this week’s Business Journal’s list.

A year earlier, the largest malls on our list saw a 7% sales gain. In 2004, they were up 9%.

A big part of the gain stemmed from newcomer, No. 9 Bella Terra Huntington Beach, which debuted with $255 million in sales. The shopping center, formerly Huntington Beach Mall, fully opened in September. It counts Burlington Factory, Kohl’s and Mervyn’s as anchor tenants.

Without Bella Terra, the shopping centers saw a modest 4% increase to $6.8 billion in sales.

This year, local retail sales are projected to rise 4.4%, according to Chapman University’s economic forecast.

Even with the housing slowdown and higher gas prices, mall owners are bullish for this year as the county keeps shopping, albeit at a slower pace.

No. 1 South Coast Plaza, the Henry Segerstrom powerhouse of luxury shopping, was responsible for $1.4 billion of the nearly $7 billion in sales for all of the centers. The mall’s taxable sales were up 8% last year, compared to 2005.

New stores to South Coast Plaza included MNG by Mango and Tory Burch. Expansions at the mall in 2006 included Tiffany & Co. and Vidal Sassoon, which reopened its remodeled salon in the former Louis Vuitton space.

South Coast Plaza, in the midst of a $30 million remodel, is home to Nordstrom’s No. 1 store and recently opened Bloomingdale’s, which ought to boost sales this year. The shopping center opened its concert hall last year, which may bring in more tourists going for the all-in-one shopping, dining and show experience.


Top Five

Rounding out the top five malls: No. 2 Fashion Island, No. 3 The Market Place, No. 4 Brea Mall and No. 5 The Shops at Mission Viejo. All held their spots from a year earlier.

Orange County’s other luxury shopping staples,The Shops at Mission Viejo and Fashion Island,also did well.

Fashion Island had an estimated 3% gain with $590 million in sales. New stores to the mall last year included American Rag, Original Penguin and Charriol, a Swiss jewelry and watch boutique.

The Shops at Mission Viejo saw an estimated 9% increase in sales to $389 million.

“We had a really good year,” said Patsy Sanquist, director of area marketing for the Shops and Laguna Hills Mall. The Shops is 100% leased, with Laguna Hills nearly full.

Keeping with its family marketing, the Shops added a Lullaby Lounge, an enclosed area for parents and their children to rest and play. Mothers can breastfeed their infants while their other children watch “Blues Clues” on the flat screen TV, Sanquist said.

The room, which opened this past December, has a living room feel, complete with a kids’ restroom and a changing table, she said. The mall’s various family spaces keep high-end families from the neighborhood rolling in.

The pairing of Target, which opened last year, and Nordstrom, opened the year before, helped No. 7 Irvine Spectrum Center. The shopping center saw a 50% increase in sales to $300 million. Excluding Bella Terra’s estimated gain, Irvine Spectrum had the biggest sales increase of the malls on the list.

“The Irvine Spectrum Center was a phenomenal performer for us,” said Nina Robinson, vice president of marketing for The Irvine Company’s retail properties.

The mall added about 25 stores in 2006, including A & #233;ropostale, Bellini Baby & Teen Furniture, The Levi Store, Bandolino shoes, Jeany jeans store, This Little Piggy Wears Cotton, Flip Flop Shops and Fuzziwig’s Candy Factory.

The softer housing market has had an effect on home furnishing sales, Robinson said. No. 11 Irvine Home Center had estimated flat sales of $210 million in 2006.

No. 6 Westminster Mall had a 6% drop in sales to nearly $338 million. The mall is awaiting a Target, expected to open this summer.


Most Money

In terms of sales per square feet, No. 9 Downtown Disney District made the most money on its leasable square feet. It had an estimated $771 in sales per square foot. The national average sales per square foot in 2006 was $403.

The Irvine Home Center had the next largest sales per square feet, $632, followed by Metro Pointe at South Coast with $534, Costco Plaza with $511, South Coast Plaza with $502 and Fashion Island with $454.

With five malls each, Indianapolis-based Simon Property Group Inc. and the Irvine Co. own the most shopping centers on the list. Simon recently added the The Block at Orange to its portfolio when it purchased Mills Corp. for $1.64 billion.

Simon Property also owns the Westminster Mall, Laguna Hills Mall, The Shops at Mission Viejo and the Brea Mall.

The Irvine Co. owns Fashion Island, Irvine Spectrum Center, The Market Place, Irvine Home Center and Crossroads / Westpark in Irvine.

Other gainers on the list include No. 20 Buena Park Downtown, No. 14 Crossroads/Westpark, and No. 13 The Village at Orange.

Buena Park Downtown, which boosted sales 5% to $123 million, has remodeled and is eyeing some more tenants for the food court area this year. Meanwhile, The Village, which posted an 11% sales gain to $200 million, is enjoying its 2005 remodel.

Buena Park Downtown saw a boost last year from new tenants Steve & Barry’s University Sportswear and 24 Hour Fitness.

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