COUNTY OF SAN BERNARDINO, CA—As part of our lead up to ICSC Western States, we’re profiling some of the leading players in the region. And while everyone knows about the industrial strength of the San Bernardino County, how does it fair in the retail?
To answer that, we met up with Brad Umansky, president of Progressive Real Estate Partners (PREP), and an expert on the San Bernardino County market. PREP specializes in the sale and leasing of retail properties in Southern California’s Inland Empire market, which includes San Bernardino County. In 2013 the firm completed more transactions in the Inland Empire than any other brokerage office and is on track to accomplish the same in 2014. The firm currently has more than 120 active listings, of which over half are located in San Bernardino County.
GlobeSt.com: What is the temperature of the retail property market in San Bernardino County?
Brad Umansky: We are seeing a definite warming trend. The level of activity is similar in 2014 compared to 2013, however, if more quality space existed, there would be even stronger retail activity. High quality space is in strong demand with rents for such space having mostly returned to pre-recession highs.
GlobeSt.com: What retailers are looking for space/looking to expand here?
Umansky: Interest remains robust amongst a variety of retailers. The quick-service restaurants including the sandwich, fast-fired pizza, specialty burger, and chicken concepts lead the way. These mostly inline operators are looking for well-located space based upon their strong sales with lower occupancy costs compared to freestanding drive-thru restaurants. The demand by value-oriented retailers remains high throughout the region. And, grocery concepts such as Smart & Final, Sprouts, Walmart Neighborhood Market, 99 Cents Only and Aldi continue to search the market for locations that meet their parameters.
GlobeSt.com: Southern California and certainly the Inland Empire and San Bernardino County are becoming increasingly diverse. How are retailers working to meet the needs of this diverse population?
Umansky: San Bernardino County has the fifth largest population in California, estimated at over two million. It’s the twelfth most populous county in the nation, with more residents than 15 of the states within the US. About half of San Bernardino County residents are Latino, with the balance of diversity encompassing white, African American, and Asian or Pacific Islander. For this reason, many of the successful retailers don’t try to cater to one segment of the population but work to broaden their appeal across all nationalities.
For example, in order to better appeal to the Latino market, many retailers have associates that are bilingual as well as having bilingual signage throughout their stores. They may also cater to a specific demographic depending on the market. Grocery stores are improving on this by the goods and food they offer. Stater Bros. recently added a tortilleria to their new store in Hesperia in an effort to better cater to its Latino customers who live in the trade area.
GlobeSt.com: What types of buyers are investing in retail property and what are they looking for?
Umansky: Buyers are either looking for single tenant properties with long term leases or they are looking for properties where they can create value over time. Many buyers recognize that lease rates are poised to rise and investors want to purchase properties where they can raise rates as the economy improves.
GlobeSt.com: How do you think the retail market in San Bernardino County will look in the next 2 or 3 years?
Umansky: I believe we will see overall improved retail health as jobs, housing and the economy continues to grow. We will also see a modest amount of new construction and a certain number of retail properties get redeveloped into non retail uses.