Opus West's Wattson

The Opus Group division Opus West Corp. recently created the new position, VP of retail development, and hired Greg Wattson to fill the slot. A 20-year industry veteran, Wattson was last at Trammell Crow, where he was SVP of retail and oversaw western states. For Opus West he is managing the company’s retail developments in Arizona, California, Nevada, New Mexico, Texas and Utah out of the Irvine, CA office. Among the firm’s projects under way are two developments in Chino Hills, CA: the 400,000-sf Shoppes at Chino Hills lifestyle center and the 500,000-sf Commons at Chino Hills. Wattson recently spoke with GlobeSt.com about Opus’ strategy and trends in the industry.

GlobeSt.com: Is working for Opus different from other firms because it has construction and design capabilities?

Wattson: Opus provides the resources upfront to get the questions answered, so as an end result it is a successful project. You can go down the hall, lay out a site plan and have immediate input from a construction and design-build point of view and solve a lot of issues up front. Whereas you typically bring in a contractor, which can work very, very well, but sometimes it can take a little bit longer. Here we just have it in house. It’s very effective, and it solves a lot of issues that may come up later in the process.

GlobeSt.com: Why do you concentrate on different retail property types instead of focusing on just one?

Wattson: Retail is always changing. You need to adapt to what the market is telling you. Where we have chosen to do lifestyle centers, the income and product type has been available to take advantage. We’re also, in Chino Hills, doing a power center on the freeway. We’re doing both product types there, and both sites lend themselves to those particular uses. When you’re in retail, the retailers are going to tell you what type of product they’re going to feel more comfortable in. We’re very flexible and can adjust. That’s very important in today’s world.

GlobeSt.com: Is Southern California the hottest market in the six-state area you target?

Wattson: We’re doing quite a bit in Texas, some projects in Arizona and we just finished one in the Sacramento area. It’s very broad over the whole region. The projects were bought and started several years ago. The most viable market today is probably not the Southern California market, it’s got its challenges. But Texas is still very healthy. We opened a 600,000-sf lifestyle center in Austin and have a couple power centers in Houston. We still fell very bullish on the Texas economy, because it’s still growing, and it’s tied to energy. In today’s economy energy seems to be the shining light. But we’re still evenly spaced across all six states. We’re trying to penetrate Utah and New Mexico, but we have projects in almost every state.

GlobeSt.com: How have you made adjustments to projects that were conceived before the current market conditions took place?

Wattson: We’re very fortunate that the projects that we opened and are about to open are far enough along that we’ve been able to ride the wave of today’s retail pushback. That’s not to say that a lot of the tenants haven’t asked to be pushed back, but we’ve been very fortunate that the project’s been far enough along that we haven’t been pushed back too much. But some markets, like power centers that need junior-anchor tenancy, are a little more challenging because they’re a little more reflective today looking internally at how they’re going to adapt to today’s economy and aren’t growing too quickly. What we’ve done is reanalyze or site plan and pro-forma and go to these tenants and try to plan for the future, so when they do come back to the market, they are fully aware of our projects and how well they are positioned in the cities.

GlobeSt.com: Are there any sectors of retail that seem to be weathering the downturn better than others?

Wattson: Well, some of the teenage forward-fashion tenants are doing better, primarily because they’re fresh, forward-thinking, like the Buckle. But I don’t think there is any one that is doing incredibly well. But retail needs to grow, and they’ll come out of this downturn stronger. Maybe there will be some consolidations, maybe some store closings. But the good retailers will take that opportunity to take market share into the good centers. The teens are the ones that are probably surviving the best.

GlobeSt.com: What is the biggest challenge that you’re facing going forward?

Wattson: The challenge is that a lot of your key tenants are pulling back on store openings. They’re not chasing the rooftops because the rooftops aren’t being built. You have to look at more urban, positioning and more mature areas where opportunities are a little more scarce. However, at Opus we feel this is a wonderful opportunity to gain market share and take positions today that will be available to go vertical in 18 to 24 months when we feel the market will come out of this and people start to grow a little bit more. We’re well-positioned. Opus has been here before, and we’re internally capitalized to take advantage of this type of market.