Retail Center Focuses on Mom-and-Pop Stores

PACOIMA, CA—The Zocalito of Pacoima, a 20,000-square-foot retail and mixed-use project, has reached 85% occupancy. Agora Realty & Management completed redevelopment of the center in July 2014. The property has a mix of national and regional tenants, but is also uniquely catering to first-time entrepreneurs to occupy space in the remainder of the building.

“Opening up our commercial space to first-time entrepreneurs creates a unique opportunity for both the landlord and future tenants,” Ryan Lefton, chief operations officer at Agora Realty & Management, tells GlobeSt.com. “Scaled-down commercial units generally demand higher rents, which can benefit the landlord while providing a lower barrier to entry for smaller tenants. This creates a mutually beneficial relationship.”

When the center opened in July of last year, it already had a 65% occupancy rating with a mix of national and regional tenants, including LA Care, Verizon and Speedy Cash. Local entrepreneurs—from a healthy taco shop called La Taquiza to a new pizza restaurant—also began filling up space. “Leasing started off strong as the national tenants, being more sophisticated than local small businesses, recognized the virtues of the location, such as high traffic count, density and strong pedestrian traffic patterns,” says Lefton. From that point, the balance of the leasing was a bit slower. It's a challenge for tenants who are first-time business owners or “mom-and-pop” operators to sometimes gauge how much they can afford as their business relates to occupancy costs. Interest in the remaining space is primarily from service businesses, including beauty salons, insurance, real estate and medical office.”

The high traffic corner, which has a daily traffic count of 65,000 cars, has been a big draw for tenants. The center also caters to potential customers walking in the area or using the nearby metro station, which has a ridership of 42,000 per day. As the center begins to incorporate more local mom-and-pop shops, Lefton is interested to see how the local community is going to respond. “The effort to provide quality in an underserved market has been a major factor in this project's success, and one that the community has fully supported,” he says.

The center accommodates tenants ranging in size from 250 to 2,500 square feet. It features mature landscaping, shaded seating, walkways and plazas that bring the community together. “We've seen pent up demand for quality design and thoughtful development,” says Lefton. “Zocalito's amenities include public restrooms, open air shaded seating and a state of the art infrastructure and aesthetics that one would see more often in a retail environment in a more affluent neighborhood.”

Retail properties without national tenants are gaining value. Earlier this week, GlobeSt.com reported a multi-tenant retail center with only mom-and-pop shops traded hands for $11 million in a transaction that drew multiple offers from potential buyers.