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/566807
60 • September 2015 • Western Real Estate Business www.REBusinessOnline.com Though food tenants can spell big bucks for landlords, Wong cau- tions that the "hip" factor surround- ing some of these tenants may lead to higher turnover down the road. A typical restaurant tenant remains at a center for about 10 years, according to Wong, while many of today's special- ty niche restaurants may only hang around for three to fve years. "Clearly, this adds increased risk for retail owners," he says. "Especially based on the higher rents charged for restaurant spaces, which translates to a greater loss when these spaces are vacated." With risk comes reward, however, as Carter Crouch, director of acquisitions for Dynamic Development Group in Santa Monica, California, can at- test. The frm has recently welcomed a couple new faces into its shopping centers that may turn out to be risky plays, though Dy- namic believes they will pay of over time. "Younger retailers who made it through the last recession have emerged healthy and lean and many of them have decided to take advantage of cheap capital and self-develop," he says. "Dynamic's concern is that these newly formed real estate departments are very young with the possibility of taking on too much development risk. With that understanding, we have po- sitioned ourselves with retailers who we believe in, and who have desire, to own. Creating partnerships with these retailers is critical to their desire to own while growing their business, but reducing their intrinsic develop- ment risk." These younger retailer development departments also face challenges when it comes to short-term growth. Crouch, however, emphasizes that big rewards can be reaped if both the landlord and tenant can make it through the some of the early humps. Barclay Harty, vice president of CBRE in Newport Beach, California, is seeing an increase in niche retailers throughout his region as well. "Instead of your traditional chain or well-known mer- chants, north Orange County is experienc- ing the expansion of independent and specialty retailers and restaurants," he says. "These new build-outs and op- erations are hip, unique, creative and thoughtful. There is pent-up demand from con- sumers wanting something unique and diferent for their neighborhood shopping experience." Harty says the trend is particularly poignant in the salon industry, where Floyd's Barber shop, 18/8, 20 Lounge and Marilyn Monroe are "aggres- sively expanding," and in the pet care industry, where Krisers and Protein for Pets have taken of. Like Wong, Harty has also seen a variety of new In Ontario, we think and act like a business. We work with you to fnd ways to make the community your business calls home a better place to thrive. MADE IN ONTARIO C A L I F O R N I A , U . S . A . WE THINK BUSINESS ontariothinksbusiness.com MAYOR PAUL S. LEON I MAYOR PRO TEM DEBR A DORST-POR ADA COUNCIL MEMBERS I AL AN D. WAPNER, JIM W. BOWMAN AND PAUL VINCENT AVIL A Westfeld will open The Village at Westfeld Topanga this month. Together with The Promenade and Westfeld Topanga, the adja- cent centers will offer more than 300 retailers to the market. Crouch Harty Studio Movie Grill, a Texas-based chain that combines a sit-down restaurant with a movie-watching experience, opened its frst California outpost at Rocklin Commons.