‘Very Competitive’ to Secure Quality Retailers Today
Today, shopping center owners are living and dying by their tenant mix—but quality retailers are choosing quality centers.
The high quality retail centers like still attract the best tenants,” Gallagher, co-founder and managing partner at Space Investment Partners, says. “We are looking to make Back Bay Center more relevant and more in alignment with the surrounding high-end demographics. The center has the potential to carry some of the best and most desired concepts in Southern California and we intend to make that happen.”
The re-tenanting strategy is a careful analysis of what is and isn’t working to curate the best tenant mix, and it includes keeping tenants that are working at the property. “We have renewed Irvine Ranch Market for 10 additional years. They have been in this center for almost 40 years,” says Gallagher. “We have some other exciting plans for them but it is premature to discuss at this point. We are planning a major investment for the rest of the center to improve the overall look. We are putting together a well-curated tenant mix that will enhance the overall customer experience.”
To attract those tenants, Space is repositioning the center to cater to local family and the community, and to make it more functional for shoppers. “We are focusing our investment in repositioning the look and feel of the center,” says Gallagher. “It is a family center that has a significant following from the local community. We will also be improving the functionality of the property for our tenants. This means improving their visibility from the parking lot and providing much better signage. These changes are of significant importance to tenants. They want to locate in retail centers that they feel will show their concept and brand in the best light possible.”
It is important to note that the Back Bay Center was not a struggling retail center. In fact, it has maintained occupancy above 95% for the last 15 years, and in the last seven years, occupancy has ranged from 97% to 100%. So, the property is certainly not struggling. Rather, Spaces’ re-tenanting plans are aimed to achieve strong occupancy in the future as the retail sector evolves. “On a macro level there is a lot happening in retail,” says Gallagher. “Most people read the news and believe that retail is dying and that there is carnage everywhere. This is not the case. What is happening is technology has enabled us to shop for most things online. However, people still like to go out to breakfast, lunch, dinner or for coffee and socialize. Additionally, men and women still seek out and shop at boutiques with unique offerings. In other words we have just begun to shift as a society away from large soft good retailer formats to a more intimate artisan experience. The shopping centers that are able to curate the correct tenant mix are doing exceptionally well.”