The past year was a mixed bag for Orange County’s collection of retail centers, with some showing gains while others reported sales decreases in the year ending June 30.
Overall, malls came out in the green, with the region’s 31 largest shopping centers recording a 6.3% increase in sales to $9.6 billion in revenue.
Brokers note the retail industry has recovered from the uncertainty of the pandemic, which brought ongoing supply chain issues, a shift to e-commerce and rising costs.
A handful of centers reported double-digit gains, with Downtown Disney District in Anaheim seeing the most growth with sales up to $337 million from $209 million, jumping three spots to No. 8.
“It comes down to having the right tenant mix,” JLL’s Justin McMahon told the Business Journal. “Retail is faring very well, for now.”
About a third of this year’s list recorded declines ranging from 1% to 5%.
Westminster Mall reported sales of $142 million for the 12-month period, down 15% from the year before. Owner Shopoff Realty Investments has made plans to add housing, a hotel and around 25,000 square feet of retail space on a 26-acre portion of the mall to revamp its offerings and up foot traffic.
McMahon pointed to the strength of neighborhood centers with grocery or big-box anchored tenants. Irvine Co.-owned Crossroads Plaza, with sales up 26% to $129 million, counts Target as one of its major tenants in the center on Barranca Parkway.
This year’s list covers about 21.2 million square feet of gross leasable space in OC. That figure is expected to change over the coming years as developers replace underutilized retail at traditional malls with other uses, including housing, experiential retail and dining.
The Tenant Train
Other shopping malls are doing more with the space they have by diversifying their tenant rosters.
The District at Tustin Legacy, No. 5, is one such example.
The Vestar-managed center’s 22,000-square-foot food hall, formerly known as the Union Market, closed last year and is making way for three new dining concepts: Shiki Shima Japanese BBQ, Pho N Mor and V Show Pary K karaoke bar, all set to open by next year.
Tom Schriber joined the mall’s leasing team earlier this year as part of efforts to introduce more playful, experiential concepts to the mall. It recently inked deals with tenants such as Top Canvas, a toy and collectibles store.
Taxable sales for The District grew 18% to $628 million as of June.
No. 1 South Coast Plaza has added new boutiques to help maintain what it calls the largest collection of high-end timepiece and jewelry stores in the U.S. The mall now has 35 such stores in total.
Newcomers this year include Graff diamonds, securing a spot on the second level of the Jewel Court in October. Van Cleef & Arpels moved into a new 4,200-square-foot location last month; it has said South Coast is one of its best-performing markets.
Longtime staples Cartier and Bulgari are also expanding their spaces by next year.
The Costa Mesa center reported sales of $2.5 billion for the 12 months ended June, up 5.6% from the year prior.
The 292,000-square-foot South Coast Collection (SoCo) in Costa Mesa, which specializes in leasing home furnishing and design retailers, was acquired for $110 million by Baltimore-based Continental Realty Corp. last week.
This year’s list resulted in rearrangements in the top 10 centers, with the Brea Mall taking over the No. 3 spot from The Market Place, now No. 4, and The District moving up over Irvine Spectrum Center from No. 5.
“We had a record year for sales in 2022, and our traffic throughout 2023 thus far has been consistently higher than last year,” Brea’s Director of Marketing Nate Weirback told the Business Journal.
“We’re encouraged by recent consumer surveys that suggest spending in 2023 will be at or above last year’s levels,” he added. The mall added 13 new retailers and restaurants in the past two years.