Shopping Center Business is the leading monthly business magazine for the retail real estate industry.
Issue link: http://shoppingcenterbusiness.epubxp.com/i/710880
CALIFORNIA 42 • SHOPPING CENTER BUSINESS • August 2016 W ith ith buyer demand high, vacancy W buyer demand high, vacancy low and competition for space accelerating, Southern Califor- nia is undoubtedly a great place to be for retail tenants and owners, alike. Experience continues to drive the re- tail sector, and redevelopments and new mixed-use projects can be seen from San Diego, to Buena Park and Inglewood. Developers and owners are shifting their sights to urban locations, and bringing in a stronger mix of service and restaurant tenants than ever before. Much of the redevelopment and merchandising mix switches occurring in the market are being carried out in hopes of getting shoppers into brick-and-mortar by creating dynam- ic experiences that can't be replicated. Chasing the creation of a consumer destination, many retailers and develop- ers are moving towards the coast for new projects. The fusion of surf and shop- ping brings a fresh take on placemaking, as many seek to create shopping centers where people want to spend their entire day — not just a few hours. While the market continues to show incredible strength, some wonder how long the retail boom will last. A recent survey conducted by Allen Matkins and the UCLA Anderson School of Managa- ment — which polls commercial real es- tate investors and developers twice yearly throughout the markets of Los Angeles, East Bay, San Diego, San Francisco, Sili- con Valley and Orange County — shows that retail construction in Southern Cali- fornia is likely to be topping out. The level of optimism regarding the market for developers dropped between December 2015 and June of this year by nearly 10 points. "That sentiment weaken- ing is an indication that at least some of the panel [of survey respondents] is now taking a more pessimistic view of the retail market going forward," according to the authors of the report. Though the outlook continues to be bright as deals are frequently being made across the market, many are cautiously optimistic regarding the near future. TOWARDS THE COAST The experiential element of shopping centers continues to grow in importance. With creating a destination in mind, many retailers and developers are flocking to- Southern California's Heat Wave The retail sector in Southern California is hot — from the coastal markets to urban centers, buyer demand is high, vacancy is low and competition for space is escalating. Katie Sloan The Source mixed-use development — located within the upcoming entertainment district of Buena Park, California — will include retail, restaurants, office, hospitality and residential.