Grocery, fitness and restaurant tenants are driving leasing activity in San Diego, especially at premier properties—but they aren't alone. The market is on the short-list of many expanding online retailers looking to create a brick-and-mortar footprint. A successful shopping center needs a tenant mix with a healthy combination for the two, according to Carrie Bobb, VP at CBRE and one of the retail leasing brokers working on One Paso, a mixed-use development with 95,000 square feet of retail space along with 608 apartment units and 280,000 square feet of office space. To create the right experience, she starts with restaurant tenants and builds up from there.

“You are definitely seeing more grocery, food and beverage and fitness tenants. Those are things that you can't get online, and that is generating the foot traffic,” Bobb tells GlobeSt.com. “At One Paso, for example, we started with our restaurant leasing, and then we started in on SoulCycles. The icing on the cake is the fashion and the apparel. That isn't a huge part of the project, but it definitely helps with the overall experience and personality and character of the project.”

Restaurants are expanding more rapidly than clothing brands, and with a much different strategy. Many brands are rolling out several dozen stores across the country, and those have been a focus for Bobb. “It is also fascinating how they are rolling out. Food and beverage brands—like Shake Shack, for example, are rolling out a lot of stores across the country,” she explains. “That segment is really different than fashion and apparel.”

Although Bobb used this restaurant-to-fitness-to-boutique-store strategy at One Paso, she says that it has become a standard leasing strategy. That is because the first two bring in foot traffic and the boutiques add character and culture to the center. In other words, they round out the experience. “In order to have a great foundation, you need to have great restaurants that are doing amazing volume, because that drives your foot traffic,” says Bobb. “Then, you hit fitness tenants. Soul Cycle can bring in 500 customers a day. Then, if you put a boutique next to Soul Cycle, the odds of success are greater. After the boutiques, you hit service tenants, like nail and hair salons. Then , you wrap it up with fashion specialty tenants that are quirky and add charm to a project. That has been our approach.”

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For the Perfect Tenant Mix, Start With Restaurants

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