Real Estate Watch: Retail Market
By CAROL SCHILLNE
Alternative Opportunities are in North, Central County
With an uncertain economy, mixed reviews for retail sales forecasts, unsteady consumer confidence and tightening vacancy rates,what are the opportunities for retail real estate in Orange County?
While gloom and uncertainty cloud the national outlook, Orange County remains resilient with steady declining vacancy rates and positive absorption.
There is an obvious shortage of buildable land for new retail projects. Most of the traditional neighborhood shopping center development is taking place in the planned community areas of South County,Ladera Ranch, north Irvine, Foothill Ranch and San Clemente among others. With a low 7% countywide vacancy rate, existing centers are running out of space.
So where are the opportunities?
For the most part, developers and tenants are turning their attention to the north and central portions of the county for alternative opportunities. They are turning to building in the core urban areas with proven demographics.
Cities are being as proactive as ever in trying to attract the sales tax-producing retailers. The recycling of space is becoming the trend. Several projects are being given everything from a minor facelift to a major redevelopment.
Lincoln Plaza, for example, is a 300,000-square-foot center that is a joint project of the developer and the city of Anaheim. It’s being constructed at the intersection of Beach and Lincoln with a reported anchor of Lowe’s.
Westridge Plaza at Beach and Imperial in La Habra is another example of recycling to accommodate a 695,000-square-foot retail development with reported anchors of Wal-Mart, Sam’s Club and Lowe’s.
The Buena Park downtown project includes three developments that may take such retailers as Kohl’s department store, Wal-Mart, Marshalls, Michael’s and a DSW Shoe Warehouse.
Pointe Anaheim is another project at the intersection of Harbor and Katella that will have a specialty/entertainment theme with the reported anchor of FAO Schwartz.
Tenants such as Kohl’s Department Store, Home Depot, Target, Wal-Mart, Smart & Final, DSW, Gigante Market and 24 Hour Fitness are very active. They are looking to expand into new markets and in-fill core trade areas to boost revenue.
It’s our challenge to twist the lense when evaluating real estate opportunities to uncover the properties waiting to be re-worked into thriving retail centers.
Schillne is first vice president in the retail property services unit of CB Richard Ellis’ Anaheim office.
