The largest shopping centers in Orange County managed a seventh straight year of growth in taxable sales with a 1.7% gain.
Retailers, restaurants and entertainment venues at the various centers posted $8.13 billion in sales, based on this week’s Business Journal list, which measures revenue for the 12 months ended June 30.
Twenty-one of 34 centers reported increases, 11 had declines, and data for the remaining two shopping centers was estimated.
The pace of growth declined from last year’s 8.6% increase but nonetheless offered a sign that the grouping of largest centers remained strong enough to offset the departure of longtime entry Laguna Hills Mall from the list.
The mid-market mall—which ranked No. 19 with $122.5 million in sales last year—dropped off this year’s list, which has a cutoff of $40 million in taxable sales for the 12-month period. The center’s owner, Merlone Geier Partners in San Francisco, is remodeling the property, a project that required demolishing nearly a third of the 74 shops and a vacant Sears building.
The centers on the list combined for 23.1 million square feet of gross leasable space and 2,647 tenants—about flat from a year ago.
The list’s leaders include:
• South Coast Plaza retained its perennial No. 1 position with $1.7 billion in taxable sales, same as a year earlier, when it notched an 18% increase. The shopping center added several luxury tenants, including Massimo Dutti and British luxury shoes and accessories brand Charlotte Olympia, for a total of 250.
• Fashion Island in Newport Beach had an estimated $700 million in taxable sales during the period, up slightly from a year earlier, and still good for the No. 2 spot on the list. The outdoor shopping center has 170 stores, two fewer than a year ago.
• Brea Mall moved one spot up to No. 3, even though its taxable sales remained flat at $497 million. The mall also retained the same number of stores: 197.
• South Coast Collection, a 301,000-square-foot furniture, fashion and food center near the San Diego (I-405) Freeway in Costa Mesa, posted the biggest growth in taxable sales—35%—to $82.7 million. Notable additions to its roster of 68 stores include high-end furniture stores Calligaris OC and Roche Bobois, which relocated from Bristol Street in July. It was “a fantastic move,” according to store manager Martyna Trembinska, who said the store’s sales rose 20% for the 12 months.
“It’s a great center to be in,” she said. “It attracts people because of the convenience of having all the stores under one sky… And none of us feel like we are competing with each other—there is a big appliance store, Pirch, nearby where all high-end clients furnish their kitchens and bathrooms, so it’s a fantastic way of working together. Everything is very much complementary to each other.”
Mike McAllister, whose Calligaris OC opened in February, shared Trembinska’s view.
“We are thrilled with the results of our first year at SoCo,” he said in an email. “The developer of this property kept a laser-focused vision from the beginning, and the end result is a collection of like-type retailers not found anywhere else in Southern California.”
• University Center in Irvine debuted on the list at No. 34. It had $40.7 million in taxable sales from 49 stores, a 22% uptick. Expect another gain next year, since Minneapolis-based Target Corp. in August selected the Irvine Company’s retail center near University of California-Irvine as one of four college campus locations where it plans to open a “flexible-format” in mid-2017. The 20,000-square-foot space—about half the size of an average Target store—will sell groceries, sandwiches, salads, beverages and snacks; health, personal care and beauty products; an assortment of dorm and apartment essentials; men’s, women’s and local sports team apparel; and portable technology products and accessories.
Next year’s list will likely feature several newcomers to OC’s retail scene—Newport Beach-based Craig Realty Group’s Outlets at San Clemente and Pacific City in Huntington Beach. Neither the 52-acre Outlets at San Clemente nor the 11-acre Pacific City were open during the reporting period for this year’s list.
Retail vacancy rate in Orange County has held at about 3.8%—the lowest since 2007—as those projects have taken shape.
A number of retail centers in the development pipeline will bring additional space across various market segments. Among them are the 300,000-square-foot Anaheim Westgate Center; the 230,000-square-foot second phase of the Outlets at San Clemente; the 128,000-square-foot Garden Grove Galleria; and the 125,000-square-foot Yorba Linda Town Center, according to CBRE Group Inc. in Newport Beach. The Source at Beach, a 400,000-square-foot shopping and entertainment center in Buena Park, is “still under construction and is scheduled to be delivered by year-end as preleasing continues,” CBRE says.
