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Status Update on Irvine Company Retail

The Irvine Company’s efforts to ensure its retail properties remain relevant to today’s click-happy shoppers have gotten noticed—and not only by the locals who descend en masse to the Irvine Spectrum Center on weekends or the well-heeled tourists flocking to Fashion Island.

Green Street Advisors LLC, a Newport Beach-based commercial real estate research firm, recently elevated its rating of the two outdoor shopping centers, citing new luxury services and restaurants as the main reasons for the upgrade.

Fashion Island got another “+” and now sports an “A++”grade—on par with South Coast Plaza in Costa Mesa. Irvine Spectrum moved up to an “A+” designation, catching up to the Brea Mall and Shops at Mission Viejo, both of which held steady on the recent Green Street ratings.

The two Irvine Co. malls are great “examples of adapting to a changing environment” in a marketplace where “the e-commerce presence is growing stronger and stronger,” said D.J. Busch, a senior analyst of the mall sector for Green Street and co-author of the firm’s latest Mall Market Snapshot, which includes the ratings. “You can’t just have only retail anymore,” Busch said. “You also have to have restaurants and services because that’s what draws customers to the mall as opposed to doing all their shopping behind the desk.”

Strategy

Newport Beach-based Irvine Co. has based its approach on “understanding our customer and who we want to target” at each center, according to Easther Liu, chief marketing officer for the developer’s retail division.

The Irvine Spectrum’s consumer base is socioeconomically and ethnically diverse, Millennial-heavy and “a little bit more family oriented.”

Fashion Island has some of the same mix, skewing upscale, thanks in part to its proximity to high-end residential neighborhoods and the Resort at Pelican Hill, another piece of the Irvine Co. portfolio.

“We get a much higher level of tourism these days, in part because of our partnership with Pelican Resort,” Liu said.

Then there are differences in the setting—Irvine Spectrum’s vibe is reminiscent of European downtowns, with apartments within walking distance of the shops.

“We have housing, we have workspaces, we have hotels and we have our retail,” Liu said about the area surrounding the mall, which is nestled amid the San Diego (405) and Santa Ana (5) freeways and the San Joaquin (133) toll road.

“A lot of what we do to evolve the center…is about bringing that 24/7 lifestyle to Irvine and Orange County,” she said, adding Fashion Island, on the other hand, is “about Newport Beach; it’s about the proximity to the ocean and having those beautiful views.”

Not every brand is a natural fit for both malls.

A Hello Kitty Café Truck made two recent appearances at the Irvine Spectrum and was a hit—parent company Sanrio Co. Ltd. now plans to open a pop-up shop come November.

“We would probably not provide that event at Fashion Island,” Liu said.

Fashion Island, meanwhile, was chosen to host the Newport Beach Film Festival’s opening night gala in April at Bloomingdale’s courtyard.

There are some crossover opportunities.

Both malls participated in last month’s eighth annual Style Week OC. Even it drew some distinctions between the two properties, though.

The catwalk at Fashion Island featured designer styles from tenant Neiman Marcus, among others. The Irvine Spectrum crowd got looks at surf and action sports merchandise along with styles from Nordstrom, Macy’s, bebe, Francesca’s Collections, Max Studio, Tommy Bahama, White House Black Market and Windsor.

The live shows are another example of making a trip to the brick-and-mortar centers special for shoppers. The events aren’t held “just for the sake of having one,” said Liu. “I got a great band that I’m bringing out—it’s more about how do we relate our shopping center to our customers, to our great brands and merchants that are within our center.”

Experience

Each property also has seen an influx of high-end eateries, including Fig & Olive and Cucina Enoteca at Fashion Island and BRIO Tuscan Grille and Del Frisco’s Grille in Irvine.

The Irvine Spectrum “started out as an entertainment and dining destination, and what we’ve done there is continued to expand that element,” Liu said. “At Fashion Island we added more of that component around the center… We realize by being able to provide places for people to dine, take in the outdoor atmosphere, as well as shop, that’s giving them one more reason to (go to the mall) versus stay in.”

Amenities, including free Wi-Fi, personal stylists at Fashion Island and signs that give updated counts of open parking spaces at the Irvine Spectrum, also play a role in enhancing the shopping experience.

SCP

Fashion Island’s new rating by Green Street shows that “the quality of the mall continues to improve from great to even better,” Busch said.

South Coast Plaza, however, is “still the most dominant mall in Orange County, and probably the most dominant mall in Southern California,” Busch said. “Maybe the Grove (in Los Angeles) is up there with it. Really what makes it so is its size—it’s still significantly larger than Fashion Island—so the size and scale and product breadth that they offer draw people all the way from San Diego to northern L.A., and that’s a very powerful dynamic of that large of a ring radius in really three markets that are not short of good malls.”

Liu said Irvine Co. wants to win a place on the regional landscape with its retail offerings.

“My dream is to go beyond Orange County and be known in Southern California,” she said.

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