Western Real Estate Business

OCT 2018

Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.

Issue link: https://westernrealestatebusiness.epubxp.com/i/1037966

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Page 35 of 56

www.REBusinessOnline.com Western Real Estate Business • October 2018 • 35 SOCAL, THE SOUTHWEST ARE PRIMED FOR MORE DEVELOPMENT Ecommerce and experience are driving development demand for just about every product type throughout Southern California and much of the Southwest. By Nellie Day W ith the Great Recession fully in our rearview mirrors, de- velopment activity has been in overdrive lately throughout South- ern California and the Southwest. Aside from strong economics, there are a variety of factors contributing to this growth, including ecommerce, the changing nature of retail, a low unemployment rate, technological ad- vances, newly emerging employment opportunities, and a healthy travel and tourism sector. Shopping for Solutions The future of shopping and shop- ping centers has led to much of the development activity in Riverside County's Moreno Valley, Calif. More- no Valley has grown tremendously over the past 10 years with a current population of more than 210,000 resi- dents and an annual growth rate of 5.04 percent. More than 2.3 million people live, work and play within a 20-mile trade radius of Moreno Valley, inspiring the city to focus on its own offerings. "Restaurants here outperform their national chain aver- ages by as much as 25.6 percent," says Mike Lee, economic development di- rector for the City of Moreno Valley. "Because more than 7,000 single- and multi-family roof- tops are in the de- velopment process, commercial developers are looking to develop more properties for various types of retail centers." The city saw the opening of 20 new restaurants within its borders last year, including Black Bear Din- er, Golden Corral, Habit Burger, Safe Haus Craft Beer & Kitchen, Mountain Mike's Pizza, Woody's Brewhouse, Pieology, Paris House of Crepes and Uncle Em's Southern Smokehouse. The Quarter, a new mixed-use project, is also underway. It will include Country Kitchen, Cof- fee Bean & Tea Leaf, ZPizza & Tap Room and FatBurger, along with a Holiday Inn Express and Residence Inn by Marriott. Just down the road, the Moreno Val- ley Mall has received new tenants, such as Miniso and Hibbett Sports, now that it has been acquired by In- ternational Growth Properties. Lee believes projects like this will lead Moreno Valley into the new age of "retailtainment" where experiences are emphasized within the dining and shopping environments. "Moreno Valley Mall is more than 95 percent occupied," he says. "The city is working with mall manage- ment on several new entertainment concepts to join Harkins Theatre and Round1 Entertainment." The city is also focusing on the back side of retail as omnichannel solutions and logistics providers have a heavy hand in our nation's ability to provide and move goods. Moreno Valley re- cently approved the World Logistics Center, which will be the largest cor- porate industrial park in California's history, ushering an additional 20,000 jobs into the city. "International mogul Amazon takes up more than 2 million square feet in the city," Lee continues. "Moreno Val- ley absorbed more than 8.4 million square feet of industrial space in the past two years, and 7 million square feet is under construction now, with more ecommerce companies currently in talks to utilize that space." Directly north of Moreno Valley, Apple Valley is awaiting the delivery of a Big Lots Distribution Center that is being developed by Haskell. "The recent decision by Big Lots to relocate its West Coast distribution center to Apple Valley demonstrates our market is ripe for industrial de- velopment and that Apple Valley is open to the private investment and job production that these industries bring," says Orlando Acevedo, Apple Valley's assistant director of economic development and housing. "The proj- ect helps to balance the economy, add- ing jobs and higher wages to the local economy, which, in turn, boosts the lo- cal retail and hous- ing markets." The 1.3-million- square-foot facility will be largest in the High Desert, Acev- edo notes, and will employ 300 con- struction jobs and up to 500 operation- al jobs when it opens in mid-2019. Apple Valley's local econo- my is currently driven by 4.2 million square feet of retail and office space, as well as 2.6 million square feet of in- dustrial inventory. These numbers are about to go up, as an 18,000-square- foot Tractor Supply store at Bear Val- ley recently received approval, as did Apple Valley Gateway Center at the northeast corner of I-15 and Dale Ev- ans Parkway. Apple Valley Gateway will represent the city's first freeway- frontage commercial center. Leasing is already underway at the 10-acre, 80,480-square-foot project, which will eventually include retail, restaurants, fuel stations and a hotel. Southern Nevada is another in- demand area that is ideally situated with room to grow. This is particular- ly true in Henderson, a southeastern Las Vegas submarket that will soon be home to the Las Vegas Raiders' corpo- rate office and training field. This $75 million project may bring 250 jobs to West Henderson, but the city's devel- opment and leasing activity doesn't stop there. Turano Baking Company took occupancy of a 125,000-square- foot facility this past summer, while Smith's (Kroger) will complete its new 482,000-square-foot distribution facility by year-end. Barbra Coffee, Henderson's director of economic development and tourism, believes ecommerce will also play an impor- tant role in her city's future. "I see ecommerce fulfillment for re- tail becoming a more prevalent con- versation," she says. "Retailers are no longer singularly focused on locating their brick-and-mortar outlets, but they are equally interested in locating their distribution centers in the right places. For our region, we are poised to meet the demands of consumers in the West, particularly in Southern Cal- ifornia. With a fulfillment location in Henderson, you can be to Los Angeles ports and back within an eight-hour turnaround time. You can do same- The 1.3-million-square-foot Big Lots distribution facility in Apple Valley will be largest in the High Desert. It will employ 300 construction jobs and up to 500 operational jobs when it opens in mid-2019. Mike Lee City of Moreno Valley, CA Orlando Acevedo Apple Valley, CA Moreno Valley has a current population of more than 210,000 residents and an annual growth rate of 5.04 percent. More than 2.3 million people live, work and play within a 20-mile trade radius of the city.

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