“Buy Local” Takes on New Meaning in San Diego’s Retail Marketposted under
Our very own Mike Spilky was invited to contribute an article about San Diego’s Retail Market for France Media’s Western Real Estate Business, issue February 2015.
San Diego is quite a boomtown as of late. The region is experiencing construction and development of new ground-up retail centers, large mixeduse projects and the rehab of older centers. All of this new space is getting absorbed quite rapidly, particularly by food users, but not just by any restaurants. Rather, it’s being snatched up by many local and regional brands that are in high demand.
Westfield has almost completed its first phase remodel of the tired Plaza Camino Real. The $300-million facelift will be a game-changer for the Carlsbad trade area. New tenants will include 24 Hour Fitness, Luna Grill, Panera Bread, Peet’s Coffee & Tea and San Diego’s first Bone Fish Grill. One very exciting second phase lease was recently signed by Tesla Motors for its first flagship showroom and service station. Other Westfield-owned regional malls set to undergo extensive renovations will be University Town Center and Horton Plaza.
Shea Properties will shortly break ground on Del Sur, a Target-anchored center near the 4S Ranch community east of Rancho Bernardo. Shea is targeting more local, regional retailers and restaurants that will resonate with the affluent neighboring communities. This bucks a long-standing trend of institutional owner’s desire to sign deals with credit tenants and national chains. Shea is not the first landlord to have a change of philosophy. Donahue Schriber has taken this approach with the lease-up of Del Mar Highlands Town Center in Carmel Valley, a smashing success. Donahue is going for round two, with renovations almost complete at Beachside Center on the west side of Del Mar Heights Road. Developer Coast Income Properties is taking a similar approach with Village at Pacific Highlands, focusing on local and regional emerging brands.
Unfortunately, many of the sexier, more local restaurant and bar tenants suburban developers are trying to attract are timid about expanding or starting their business outside of San Diego’s urban core. More than 520,000 square feet of new retail is proposed or under construction in Downtown as of this past July, according to Civic San Diego. Little Italy and East Village are seeing the most velocity of growth in the urban core with new mixed-use projects sprouting up all over.
HG Fenton has been quietly acquiring properties in Little Italy over the past few years. One of these properties, formerly occupied by the San Diego Reader, will feature 97 apartments, 17,000 square feet of retail and an 11,000-square-foot public plaza. New leases signed in the area include the 20,000-square-foot lease-up of the Ariel Suites tower on the corner of Beech and Kettne by two new restaurants, Pan Bon and soon-to-come Bracero from celebrity chef Javier Plascencia. Alliance’s Broadstone Little Italy also boasts 199 residential units and 9,500 square feet of retail fully leased by Café Gratitude from Los Angeles.
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