COVINA, CA—Stater Bros. Supermarket has signed a 15-year lease for a 42,000-square-foot anchor space at Grand-Covina Plaza, a shopping center in Covina, CA. The anchor location has remained vacant for the past two years after Albertsons, the former anchor tenant, vacated. The lease value was not disclosed.
The landlord has sought a grocer to fill the space since Albertson’s left, but found it difficult to find a traditional grocery tenant. Many traditional grocers are being hit by the changing retail landscape. “Stater Bros. is one of the few, what I would call, full-line grocers that is in an expansion mode now,” Terry Bortnick, Argent Retail Advisors founder, tells GlobeSt.com. Bortnick represented the landlord in the transaction. “Ralphs has not been opening new stores, Albertsons is in a store liquidation and Safeway is now in the process of being hired by Cerberus. The only full-line, Southern California, credit grocery store that is doing deals is Stater Brothers,” he adds.
While the space sat vacant, Bortnick looked into other grocery options, like ethnic and regional grocery stores. However, he found that there was either too much diversity in the area to attract an ethnic grocer or the niche and regional grocery stores didn’t have the financial stability the owner wanted. A retail landlord wants to make sure that you are going to weather the storm,” he says. “The area is mostly middle-income, and Stater Bros. is an expert at operating in these types of areas. It had a hole in its network of stores in the area and this was an opportunity for them to fill in that space.”
Stater Bros. will begin renovating the location immediately and plans to take occupancy by November 2014 for the Thanksgiving season. Additionally, the owner plans to renovate the center significantly to attract a new tenant mix, including shops, restaurants and junior anchors to the 112,000-square-foot site. The current tenant roster includes Dollar Tree, KFC, 7-11, H &R Block and Radio Shack.
GlobeSt.com’s sister publication recently published a story about the consolidation and general upheaval in the grocery store sector, questioning who would come out on top. The story reviewed all of the major players in the industry.