SANTA MONICA, CA—Related California has signedthree new restaurant leases at OceanAvenue South, a $350 million luxury mixed-use developmenton Ocean Avenue. The new tenants include Joan's OnThird, Herringbone andeLOVate, all of which will open this summer. Thisis a significant selection of new restaurants and shows theincreasing demand for restaurants in retail-type spaces, especiallyin a market where the retail vacancy rates are already a low2.8%.

“Restaurants are the most active category in retail right now. Iam seeing more demand from restaurateurs than I have seen in sevenor eight years,” Zachary Card, a broker atCBRE, tells GlobeSt.com. “It reminds me of theheyday in 2005 and 2006. During the recession, restaurants werereally one of the first categories to slow down—but it is back witha vengeance. The demand for restaurant space grossly outweighs thesupply and it has allowed us to be extremely selective on who wepartnered up with. In a mixed-use project, landlords look topartner with restaurants because it acts as an amenity base intheir project. There is nothing better than having phenomenalrestaurants on the ground floor of your mixed-use project.” Cardrepresented the landlord in the transaction along with his CBREcolleague Casey Jahn.

Card didn't just pick any three food-service options for thisspace, however. The marketing team looked for chef-driven boutiqueand gourmet restaurants that serve the local community andtourists. “We wanted an eclectic blend of local, regional andnew-to-market restaurateurs. We think we have a phenomenal line-up,being mindful of overlap,” says Card. “We wanted each restaurant tobe a destination within themselves, and then complementary to theoverall restaurant programming, so it is really creating a newrestaurant row on Ocean Avenue between Colorado and Pico. This isreally the most significant grouping of restaurants to open upsince Santa Monica Place opened in 2010.”