TUSTIN, CA—Retail centers with strong fundamentals are beginning to move away from the “just keep it leased” mindset by seeking better-quality tenants with synergies that more accurately serve their local markets, Matt Hammond, Corland Cos.‘ director of retail brokerage, tells GlobeSt.com. The locally based firm has recently been awarded four listing assignments by Watt Cos., one of which in particular calls for a focus on attracting these higher-quality tenants.
Santa Fe Springs Marketplace, a 175,364-square-foot, well-located grocery-anchored community shopping center in South Los Angeles County, is one example. Coreland has been tasked with finding more synergistic tenants to lease up the center, which features such national tenants as Food-4-Less, Rite Aid, O’Reilly Auto Parts and IHOP. Hammond and senior associate Ben Terry will handle the leasing assignment.
“Over the last five years, the owner’s plan was to just stay occupied,” Hammond tells GlobeSt.com. “But now, as we’ve come out of that recession and have two very strong anchors, we’re evaluating how we can get better tenants in here. We’re looking at combining spaces, splitting spaces or relocating tenants, but overall, we’re looking for strategic opportunities to get better tenants.”
Hammond points out that not all properties are ready yet for the next level of leasing that Santa Fe Springs Marketplace is. Many are still merely trying to keep up occupancies in a sector that has been struggling with the after-effects of the recession and the impact of e-commerce.
The other Watt Co. listing assignments in Southern Los Angeles County that Coreland has received include Western Town Plaza, a 23,000-square-foot neighborhood shopping center in Torrance anchored by Spires Restaurants and 7-Eleven; New Horizons Plaza, an 18,000-square-foot convenience center positioned in the residential trade area of Torrance; and Sadie Lane, a 14,000-square-foot retail strip center located within the dense trade area of Artesia. Senior associate Joseph Kim and associate John Heard will handle the Western Town Plaza and New Horizons leasing assignments, while Kim and Hammond will represent Sadie Lane.
According to Kim, who also represents such ethnic retailers as Waba Grill and Tutti Frutti, “With a strong surrounding Asian/American population, there is a tremendous opportunity to attract local, emerging retailers and restaurateurs to these three centers. These are stable communities of the nation’s fastest-growing multicultural segment. Adding quality tenants to the lineup will further increase shopper traffic and loyalty.”
Centers that cater to local ethnic communities have been quite popular in Southern California and are selling for record-low cap rates. As GlobeSt.com reported earlier this week, an Orange County-based private investor has made its first commercial-property venture by buying of Garden Grove Festival Square, a 35,515-square-foot retail strip center in Garden Grove, from Atherton, CA-based investment company Meredith Enterprises for $11.9 million, representing a 5.59% cap rate. The center is leased to a mix of regional and local tenants including Popular Community Bank, Woori American Bank and United Dental Group.