Western Real Estate Business

MAY 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/978056

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Page 53 of 66

www.REBusinessOnline.com Western Real Estate Business • May 2018 • 51 This is particularly true at the satu- rated high end of the grocery chain where competition and pressure from rapidly changing ecommerce shopping trends generally seems to be greater. One area that has seen growth is economically focused gro- cery operations. Smart & Final and its more upscale Smart & Final Extra format opened 18 new stores in 2017 and are on schedule to open about 25 new stores in Northern California in 2018. Smart & Final's new format is expanding offerings by giving cus- tomers farmers market-style fresh offerings and groceries at low prices alongside its more traditional bulk products. Other bulk players like Grocery Outlet have also expanded. Smaller-format grocery stores is an- other trend to watch in the Bay Area. This is especially evident in denser urban areas where traditional large grocery store footprints are hard to find and even more expensive to build and fit-out. This has led some grocers to experiment with radically different store sizes and configura- tions. Some 50,000-square-foot-plus operators, such as Safeway, are ex- perimenting with footprints as small as 15,000 square feet in the Bay Area. Salt Lake City (Brian Anderson and Brandon Rawlins, Vice Presidents) Bulk grocers Winco and Costco con- tinue their expansion in Greater Salt Lake City, seemingly unabated. The same can be said for specialty- and natural food-focused grocers, such as Sprouts and Natural Grocers. Tradi- tional large-box grocery stores have remained strong with few closures, even though national chains like Smith's (Kroger) have largely halted new store expansion. San Diego (Craig Killman, Executive Vice President) Shoppers have never had more grocer options in the San Diego area. After grocery store expansions went crazy in 2016, the industry took a min- ute to digest in 2017. New grocery store openings reached 13.4 million square feet across the country, which was a decrease of 28.8 percent year- over-year. New concepts like Lazy Acres (Encinitas/Mission Hills) and ethnic markets like Hoa Hing Market, 99 Ranch, Mid-East Market, Marukai Market and others are offering shop- pers cultural alternatives to tradi- tional grocers like Ralphs and Vons. Grocery-anchored centers continued to be an attractive property type for investors in 2017 with sales volumes increasing by 5.3 percent. Seattle (Sudarshan Sampath, Research Manager and Izzy Cannell, Senior Research Analyst) Tech companies in Seattle are rec- ognizing the need to provide lifestyle amenities for their workers to hire and retain top talent, especially as that tal- ent starts to mature. We are seeing that manifest in the form of health con- scious grocery stores. For example, the new Rainier Square development in Downtown Seattle is leased by a firm and will house a 20,000-square- foot PCC Community Markets organ- ic grocery store. In a similar vein, the new Vulcan development at 23rd and East Union in Seattle's Central District neighborhood will house Portland, Ore.-based organic grocer New Sea- sons. n Trader Joe's anchors SR Ranch Shopping Center in the Scripps Ranch submarket of San Diego. $2B in Retail Transactions Kidder Mathews assisted its clients with over 13 million square feet of leasing and sales transactions over the past four years including the following retail transactions: Harbor Freight Tools - 3 Transactions 52,075 sf leased Hobby Lobby, Salem, OR 42,535 sf leased Sky Zone Indoor Trampoline Park, Phoenix, AZ 27,000 sf leased Equity Residential - 15 Transactions 23,860 sf leased Pier 54 Ivar's Building, Seattle, WA $39.5M sale/leaseback 500 Mercer, Seattle, WA $17.75M sale Laveen Village Marketplace, Laveen, AZ $14.2M sale For assistance with your commercial real estate needs, visit us at ICSC RECON 2018 Las Vegas | Booth S4400 Brian Hatcher, Mark Read or Robert Thornburgh Executive VP's, Brokerage 877.454.3337 kiddermathews.com WASHINGTON OREGON CALIFORNIA ARIZONA NEVADA BROKERAGE | PROPERTY MANAGEMENT | APPRAISAL | CONSULTING OFFICE | INDUSTRIAL | RETAIL | INVESTMENT | LIFE SCIENCES | MULTIFAMILY CITY CENTER Member of International Council of Shopping Centers Kidder Mathews is the largest independent commercial real estate firm on the West Coast, with over 700 real estate professionals and staff in 21 offices. Experience. Solutions. Results. 89 Transactions 333,006 sf 27 Transactions 49,372 sf 15 Transactions 20,385 sf 16 Transactions 32,928 sf 14 Transactions 118,213 sf 18 Transactions 581,000 sf City Centre | Leasing Ivar's | Seller Representation 500 Mercer | Seller Representation

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