Shopping Center Business

MAY 2016

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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Page 156 of 358

IRVINE SPECTRUM 152 • SHOPPING CENTER BUSINESS • May 2016 space over the next 10 years. There are 5,100 apartment units — all owned and operated by Irvine Company — in the immediate proximity of Irvine Spectrum Center with 1,900 more units under devel- opment. When Irvine Company's current plans for multifamily apartments are com- plete, there will be 7,000 units in the area. Nearby, Irvine Company recently opened the 120,000-square-foot Los Olivos Mar- ketplace, anchored by Whole Foods Market. Alton Marketplace, at 332,000 square feet, is home to Walmart, Office Depot, PGA Superstore and other big box tenants. Two hotels — a Doubletree and Courtyard — operate near the center and serve the Irvine office market as well as visitors to Irvine Spectrum Center. Irvine Company is developing a full-service Mar- riott hotel across from the Courtyard. "The Irvine Spectrum Center is an inte- gral part of the master-planned zone," says Ken Gillett, senior vice president of oper- ations for Irvine Company Retail Proper- ties. "Having a shopping, dining and en- tertainment experience makes all of the other components of the total area more valuable to residents and office tenants." "It is really mixed-use on a scale that most developers don't talk about," says Moore. "It is acres and acres of different uses, all cohesively bonded through land- scaping, signage, pedestrian lighting and other features so that people know they are still in the same village." While many entertainment centers were built in the early 2000s, many have since floundered as their owners made few changes. Irvine Company, mean- while, has constantly reinvested in the success of Irvine Spectrum Center. Sec- ond and third phases were added to the center from 1998 to the mid-2000s bring- ing Macy's, Nordstrom, Target, H&M and Apple among others. The company reinvested heavily in the project during the Great Recession to add a number of restaurants and entertainment venues. Ir- vine Spectrum Center is home to one of the top performing movie theaters in Cal- ifornia and the nation's Number 1 com- edy club, and consistently ranks Number 1 in restaurant sales among regional cen- ters in Orange County. Irvine Company Retail Properties strategically located restaurants like Cucina Enoteca, Wood Ranch BBQ & Grill, Tender Greens, Luna Grill and Paul Martin's American Grill near the theater in 2012 and 2013 to take advantage of theater-going traffic. P.F. Chang's China Bistro and California Pizza Kitchen also remodeled its location at the center around the same time. After the new restaurants were added in 2013, Irvine Company Retail Properties stated that the restaurants were producing more than 20 percent of the center's sales. To ready for the growth in the market and to accommodate new audiences it is already seeing, Irvine Company is reinvest- ing $150 million in Irvine Spectrum Cen- ter. Making this possible was the mutual decision by Macy's to close its location at the center earlier this year as part of a round of store closings announced by the retailer. The two-story, 140,000-square- foot Macy's building at Irvine Spectrum Center will be demolished to make way for new retail and restaurants. A new pedestrian paseo will flow through the area, connecting to the center's existing pathways to create a loop through Irvine Spectrum Center. Along that new paseo will be about 110,000 square feet of new retail and restaurants, as well as new pub- lic seating areas. A few buildings will be erected to create a new retail area for the center. "We want to use the opportunity to rebalance the retail and restaurant offer- ings to the south part of the center," says Moore. "We want to create a stronger re- tail presence in that area by adding new retailers and brands that are unique to Orange County and Southern California." "We have letters of intent or signed leases for approximately 70 percent of the new retail and restaurant space we'll be adding to Irvine Spectrum Center," says Fred Collings, senior vice president of leasing for Irvine Company Retail Prop- erties. "Our early estimates are that the new space will generate ten times the sales productivity of the Macy's store." "We are anticipating a big change not only in the sales volume, but in the traffic of the center as well," says Moore. "Much of the new retail we are adding, as well as new restaurants, will not be available at any other destination in Orange County." (left to right) Fred Collings, Dave Moore, Ken Gillett and Easther Liu of Irvine Company Retail Properties. Irvine Spectrum Center now sits in the middle of a thriving mixed-use community, surrounded by offce and multifamily properties.

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