IRVINE, CA—The buzz in the retail leasing and development world is all about grocery-store consolidation and creating places for people to gather, socialize and be entertained, Jim Auther, SVP of Coldwell Banker Commercial Alliance here, tells GlobeSt.com. These two trends, along with the impact of e-commerce on brick-and-mortar shops, are redefining the retail arena, particularly in Orange County, he says.

“In the Orange County market, one of the interesting developments coming up is the Safeway/Albertsons merger, which includes Vons and Pavilions stores,” says Auther. “It will be interesting to see which stores stay open and which are closing.”

As GlobeSt.com reported earlier this month, the Orange County office of CBCA hired veteran broker Auther as SVP. Auther has more than 35 years of experience in retail brokerage and development with a focus on landlord and tenant representation.

Auther differentiates the various grocery-store categories in Orange County and says each has its place: organic operators like Sprouts and Whole Foods; ethnic markets, particularly Latino and Asian; main line stores like Ralphs, Vons and Alberstons; and discount stores including Smart & Final and Aldi. “I think when the Vons/Albertsons thing shakes out, there will be enough operators to backfill the vacated stores. People are waiting on the sidelines until they find out which are coming back on the market.”

Rents and absorption are definitely going up in this market, Auther adds. Also, older malls are being renovated and bringing in restaurants and entertainment uses. “Fashion Island is bringing in a lot more restaurants on their pads. We're seeing that to compete with e-commerce. Shopping centers need to be a place of gathering and entertainment for consumers. We're figuring out a way to get consumers back to our shopping centers, and we'll see a continued drag on sales if we don't—this is standard around the country.”

Value-added stores like Ross and Home Goods are still looking for sites, and Hobby Lobby is “able to take down a lot of box space that came on from Mervyn's and some of the department-store guys,” Auther says. “I still think we'll see another round of department-store closings, and we'll need to see how to recycle that square footage.”

Development-wise, Plaza San Clemente will be the first outlet mall built in Orange County, and Pacific City—built by DJM Capital Partners in Huntington Beach—will be a blend of boutique hotels, apartment homes and retail, Auther says. As GlobeSt.com has reported recently, DJM is also working on Lido Marina Village, “and both that and Pacific City are interesting because they're coastal—literally on the water. We haven't seen any of that type of development in a long time in Orange County.”

Many operators are fighting for the same square footage of 2,500-3,500 square feet, and there isn't a lot of space like that available for food operators, says Auther. “That's a hot little jewel-box type of development if you can find it. There's a lot of competition in that category, which drives rents up.”

Within Pacific City, Lot 579 will be set up like a swap meet, dividing a large space among small local eclectic vendors selling food and other unique items. Auther says this is part of the trend to keep consumers interested in the retail experience. “Consumers only have so much time, and we have to make a better mousetrap.”

Overall, he believes that the Orange County market is “definitely healthier than it was during the last little recession. Residential projects are coming on-stream, plus a shopping center or two and the reworking of malls.”