As employment opportunities rebound, the state is poised for an economic and retail surge.
Although unemployment is high and housing is tight in manymarkets, the tide appears to be turning. With some regions in the early phases of a boom, two industries -- high tech and entertainment -- lead the state's resurgence. International trade, particularly with the Pacific Rim, also plays an increasingly significant role as do California's financial and management services industries.
The California retail scene, on the whole, is a case study in shrinking available space and minute vacancy. Many of the state's major markets -- San Francisco, for one -- have hit a lengthy retail stride, and others are feeling the crunch of a tight real estate market. Despite some lukewarm economic reports and worries of retail saturation, the state overall is enjoying a healthy retail run.
A mixed employment bag Although the job market is expanding rapidly, state unemployment of about 6.5 percent remains above the national average of about 5 percent, according to The Anderson School of Business at UCLA. The percentage varies considerably by region; unemployment in the San Francisco Bay Area falls below the national average, while unemployment in Los Angeles -- especially in the Central Valley -- exceeds it.
The Anderson School predicts that California unemployment will drop below 6 percent in 1998. It also projects real income growth will run about 3.5 percent over the next few years.
The relatively high unemployment rate could eventually be curbed, explains Ira Kalish, a senior economist in the Los Angeles office of New York-based Price Waterhouse. Business expansion creates a continuing demand for new employees, but high housing costs are slowing the influx of new residences, he says.
According to Mark Van Ness, president of Sperry Van Ness, an Irvine, Calif.-based shopping center investment, many new jobs in Southern California are high-paying. The same is true to the north, where high-tech and financial services are driving an unexpectedly strong economic renaissance, according to Frank Lopez, communications director for the Santa Clara Valley Manufacturers Association.
Brokers estimate San Francisco has a residential rental vacancy rate of about 1 percent. Housing is in such short supply in Santa Clara County that homes listed for $300,000 are selling in a week for $50,000 and more above the asking price, according to a study published by The San Francisco Examiner.
Southern California markets are not so tight, according to Van Ness, primarily because many people moved when the defense industry downsized. However, Van Ness predicts a more acute housing shortage in that region.
Retail takes new shape Despite sparse available housing and high wages, general confidence in real estate is somewhat shaky. Many analysts fear another round of overbuilding.
Kalish calls the current period the "accelerated phase of recovery" and suggests it will quickly give way to moderate economic growth stretched over five to 10 years. He considers the retail market already overbuilt and consequently at greater risk from imprudent development.
So far, says Van Ness, new retail construction is at a minimum, built to fill a definite need rather than speculative demand. A large roster of proposed projects in Southern California makes some observers nervous. Land constraints, environmental regulations and stringent planning policies make overbuilding much less likely in Northern California.
According to Matt Alexander, broker for San Francisco-based Terranomics Retail Services, retail markets are undergoing significant transformations throughout the state. In the north, streetfront retailing has become a major factor, with rents on many urban streets equal to those in the best malls. In the south, streetfronts play a lesser but still growing role.
The rise of ethnic retailing also is noteworthy, Alexander says. Once confined to a few neighborhoods in San Francisco and Los Angeles, ethnic identities are solidifying in many cities. For example, he notes, Daly City, immediately south of San Francisco, is heavily Filipino, while Westminster outside Los Angeles is dominated by Southeast Asians.
As a result, centers that used to have a standard supermarket now have chains such as Ranch 99 that carry standard brands as well as products geared specifically to ethnic minorities. Small, upscale chains and natural food retailers are gaining strong footholds in high-income or high-education areas, says Alexander.
Boom times have definitely returned to parts of Northern California, with the economy from San Francisco south through San Jose absolutely on fire. The East Bay and North Bay are returning more slowly to prosperity, as is Sacramento. Only the Central Valley is trailing, with its economy hampered by the seasonal nature of area agriculture, on which it depends.
Silicon Valley is experiencing phenomenal growth in software and communications technology, with companies growing so fast office vacancies are down to 1percent and 2 percent in key submarkets, according to Mark Ritchie, president of San Jose-based Ritchie Commercial Real Estate.
San Francisco Fog or no fog, the San Francisco retail market never seems to cool down, and right now the market is particularly hot. "We have a lot more tenants than we have space in the Union Square area," affirms Nick Toussaint, president of San Francisco-based Toussaint & Associates. "[Requirements] range from as low as 1,500 sq. ft. all the way up to 55,000 sq. ft."
The situation is equally tight for neighborhoods. According to Rick Hopper, retail specialist with Terranomics, the vacancy rate hovers around 1 percent in core blocks of the most popular neighborhood shopping districts.
The space shortage has driven annual rents to highs of $350 per sq. ft. on Union Square and more than $40 per sq. ft. in the hottest neighborhoods, according to most brokerages. Hopper reports that the shortage also has led to the use of "key money," a bonus paid from a future tenant to a landlord to guarantee leased space before the current tenant's lease has expired.
In addition to a booming tourist trade, strong demand and the shortage of space will combine to accelerate conversion of upper level office space to retail, says Toussaint. "The only way demand can be met is to go vertical," he notes. At least four downtown auto showrooms have been converted to multi-level retail spaces.
San Jose/San Francisco The Santa Clara County and especially San Mateo County retail markets have long had strong tenant demand due to the area's generally high income. The problem, says Bruce Bean, a broker in the San Francisco office of New York-based Cushman & Wakefield, has been and continues to be shortage of space. "Retail has typically always run at about 2 percent vacancy," he says.
According to Julie Taylor, a retail specialist with San Francisco-based Epsteen & Associates, about the only way to find good space in established markets is to move before a space becomes vacant. Further, she says a trend to more upscale shopping has pushed streetside rents to record levels. Taylor pegs monthly rents for shop space between $2 per sq. ft. to $2.50 per sq. ft. in new Peninsula and South Bay shopping centers, and $3 per sq. ft. in the better downtowns and at Stanford Shopping Center.
East Bay Market analysts have long considered the highly developed inner ring of the East Bay understored, but a premium on space has limited developers to in-fill and redevelopment projects. Almost all new developments in the Interstate 80 corridor from Richmond to Fremont occupy former industrial land. The Interstate 580 corridor from Danville to Concord suffers a similar land shortage, but intense residential development further east from Antioch to Brentwood presents opportunity for new retail projects there.
Downtown Oakland continues to struggle, but a fast improving office market promises finally to provide a large enough base of daytime workers to draw new retailers. Most neighborhood and suburban markets are experiencing steady growth, with demand particularly strong for storefront space along urban streets with heavy foot traffic.
According to Grubb & Ellis, monthly retail rents throughout the I-80, I-580 and I-680 corridors range from $1.25 per sq. ft. to $2.25 per sq. ft. Broadway Plaza in Walnut Creek and Stoneridge Mall in Pleasanton garner higher levels, as do a few key street locations in high-income communities.
Sacramento & Central Valley A host of new projects initiated in Sacramento, Fresno and Modesto in the last year confirms that the Central California retail market has come back to life. Over the past year, developers began eight to 10 retail projects (most of them new) in the Fresno-Clovis area, with more to come, according to Troy McKenney of Fresno-based Pearson/Grubb & Ellis.
Close to a dozen new projects, including a new regional mall, have opened or are in development in Sacramento, reports Bryan Wirt, sales associate in the Sacramento office of Boston-based Colliers International. Brokers say the activity reflects pent-up demand from both residents and retailers, as well as anticipated demand from a stronger housing market.
According to local brokers, overall vacancies in Central Valley markets are low due to the lack of new construction. Low vacancies have not driven rents up, however, and the spate of new projects should keep rents from rising in the near future, they add. Brokers peg rents at $1 per sq. ft. to $1.40 per sq. ft. triple net for new shop space and 70 cents per sq. ft. to 90 cents per sq. ft. for big boxes.
Vacancies are higher in the Sacramento region, hovering around 9 percent. Rents are holding at $1.75 per sq. ft. for community centers and 25 cents lower for neighborhood centers, Wirt says.
With close to 10 million sq. ft. of new retail construction underway or planned in Southern California, many analysts worry the stage is being set for another bust. Investors, however, apparently think otherwise.
According to Van Ness, there has been a surge of investor interest since January and a steep jump in retail selling prices since June. His firm, for example, closed in July on a Barnes & Noble-anchored center in Valencia with a list price of $11.45 million and a 9 percent cap rate.
The high-tech, biotech and entertainment industries are quickly making up for jobs lost in the defense industry, according to Kalish Employment in the construction industry is soaring in response to the demand for new space of all kinds.
Los Angeles Los Angeles, the Inland Empire and Ventura County added about 100,000 jobs in 1996, according to Grubb & Ellis. The increase was projected to be smaller this year, but employment trends through June suggest they will not slow. CB Commercial Real Estate Inc., Los Angeles, reports unemployment for the area runs at 7 percent.
Grubb & Ellis reports retail sales in Los Angeles increased 5 percent, and retail building valuations increased 50 percent in 1996, while sales are on target for a possibly larger jump in 1997. Construction activity is surprisingly high, with more than 2.5 million sq. ft. of new, value-oriented retail planned in the South Bay alone.
Alexander sees overbuilding in the area as a serious concern. In his view, only about 15 percent of the region's 77 malls function at a high level. Many others do well enough to survive, but Alexander says new competition poses a serious threat to existing centers.
Grubb & Ellis terms the market as "chaotic," noting that retailers are not expanding at uniform rates in all submarkets. They are showing the greatest interest, the brokerage says, in underserved, high-density urban neighborhoods.
Orange County New York-based Sales & Marketing Management magazine's 1996 Survey of Buying Power ranked Orange County 15th of 320 MSAs in terms of effective buying power, making it one of the strongest markets in the nation. According to CB Commercial, unemployment stands at about 3 percent, the lowest rate in Southern California; 33,000 jobs were created in the county last year.
According to Grubb & Ellis, nearly 1.3 million sq. ft. of retail was built in 1996 and well over 2 million sq. ft. -- a large majority of which is entertainment-related -- is planned for 1997. The brokerage reports that almost all new space built in the past three years has been occupied upon completion.
Vacancy rates, nonetheless, are fairly high, averaging just under 9 percent but reaching above 10 percent in the north county, according to CB Commercial. Both Grubb & Ellis and CB Commercial attribute high vacancy to outdated product and the large number of unanchored strips built in the 1980s.
San Diego County No longer does the San Diego economy depend upon the Navy and retirees. Bio-tech, telecommunications and software form the economy's new backbone. According to San Diego Economic Development Corp., between 15,000 and 18,000 jobs were created in San Diego County in 1996, and as many are predicted for this year.
Although retail vacancy in the area dropped to about 7 percent in the first quarter -- the lowest point in six years, according to CB Commercial -- anticipated completion of at least 1 million sq. ft. of space in 1997 is likely to keep the figure from declining. Between 3 million sq. ft. and 4 million sq. ft. of proposed construction has some analysts concerned, but others insist it will help serve a fast-growing population.
According to both Grubb & Ellis and CB Commercial, San Diego's combination of high-paying jobs and lower housing prices compared to those of Los Angeles and Orange County leaves residents with more disposable income than most other Californians.
Shrinking retail, office and residential vacancies, coupled with a number of industries that have injected optimism in the state's hills and valleys, give California much to look forward to. Although some pundits worry about retail overbuilding in some markets, overall the state has broken out of its recession with an optimistic look to the future.
* Dallas-based MEPC American Properties is continuing redevelopment of Northridge Fashion Center, a 1.5 million sq. ft. center in Los Angeles. By spring 1998, the mall will welcome a 10-screen Pacific Theatre complex in place of Robinsons-May, which has moved to consolidate its home and apparel stores. MEPC is in discussions with themed restaurants, a book superstore and several entertainment retailers as potential tenants.
Kaleidoscope * Samsung PDP Kaleidoscope L.L.C., a limited liability company formed by Beverly Hills, Calif.-based Pacific Development Partners and La Mirada, Calif.-based Samsung Pacific Construction Inc., is developing Kaleidoscope, a 215,000 sq. ft. urban entertainment center in Mission Viejo. The project is due for completion in May 1998, and will be tenanted by Edwards Theatres and Bristol Farms. Negotiations with future tenants are ongoing.
* Minneapolis-based Madison Marquette Realty Services has broken ground on The Gardens on El Paseo, a 200,000 sq. ft. open-air center in Palm Desert's Coachella Valley. Upon its completion late next year, the $50 million development will feature Saks Fifth Avenue resort store, Brooks Brothers, Williams-Sonoma, AnnTaylor, Banana Republic and Talbot's.
* Torrance, Calif.-based LaCaze Development Co. is nearing completion on the renovation and expansion of 400,000 sq. ft. Rolling Hills Plaza in Torrance, Calif. The center's AMC theater will expand to a 20-plex cinema with stadium seating, which is due for completion in December. New tenants will include Macaroni Grille, Trader Joe's, Islands, Koo Koo Roo and Hollywood Video.
* Santa Barbara, Calif.-based Wynmark Co. will break ground this fall on Camino Real Marketplace, a 500,000 sq. ft. center in Santa Barbara. The center will feature Costco, Home Depot, Staples, Linens 'N Things and Metropolitan Theater. It is due for completion during the first quarter of 1998.
* Los Angeles-based Forest City Development California Inc. broke ground last month on The Promenade in Temecula. The center's 782,000 sq. ft. first phase, anchored by Sears, JCPenney, Robinsons-May and a 14-screen theater, is due for completion by March 1999 and will feature 100 specialty stores. The project's second phase will include additional retail shops and a 255,000 sq. ft. power center.
Forest City is in predevelopment for 1 million sq. ft. Imperial Valley Mall, an enclosed regional center in El Centro. The project will be anchored by Dillard's, Sears and JCPenney. It has an estimated completion date of spring 2001.
In partnership with Fresno, Calif.-based Lance Kashian Co., Forest City has opened The Marketplace at Riverpark in Fresno. The 480,000 sq. ft. power center's first phase features Target, Sports Authority, Best Buy, OfficeMax, Marshalls, Old Navy Clothing Co., CompUSA, Linens 'N Things and JCPenney Home.
Forest City will be adding 156,000 sq. ft. to the Shops on Lake Avenue in Pasadena. Phase one of the project, due for completion by spring 1999, will feature Macy's, Gelson's Market, Borders Books & Music, a 27,000 sq. ft. arts theater and a 1,250-seat cinema.
In Anaheim, Forest City is planning Anaheim Sportstown, a 750,000 sq. ft., sports-themed retail and entertainment center next to Anaheim Angeles baseball stadium. The project, currently being negotiated with the City of Anaheim, is slated for completion in Spring 2001. Tenants have yet to be named.
A General Cinema Theatres complex is being added to The Galleria at South Bay, a project of Redondo Beach, Calif.-based South Bay Associates, a California limited partnership consisting of Forest City and California Public Employee Retirement System. The 69,514 sq. ft. megaplex will feature 16 screens, stadium seating and digital sound. It is due for completion this November.
* Indianapolis-based Simon DeBartolo Group is expanding and renovating Mission Viejo Mall in Mission Viejo. Nordstrom will be the center's newest anchor -- built adjacent to a former Montgomery Ward store -- with an expected completion of fall 1999. The vacated Montgomery Ward space will be converted into 147,000 sq. ft. of additional mall specialty stores, which are expected to be complete by fall 1998. After the renovation is complete, the center will feature 175 shops and more than 1 million sq. ft. of GLA.
* Vista, Calif.-based Pan Pacific Retail Properties (formerly Pan Pacific Development Inc.) is nearing completion on phase II of Laguna Village Shopping Center in Sacramento. The project will stretch the center's GLA to 125,000 sq. ft. New tenants will include Original Pete's Pizza, Espresso Yourself Coffee House, Maui Tan, Kim's Total Salon, Thomas Kincade Galleries, Thai Basil Restaurant, Elite Cleaners, Laguna Market, Max Muscle and 24-Hour Fitness.
* Woodland Hills, Calif.-based Raznick & Sons is in predevelopment for Trolley Square, a 200,000 sq. ft., mixed-use development in Canyon Country. The project is slated for completion in 1998, and negotiations are ongoing with future tenants.
* Manhattan Beach, Calif.-based Alexander Haagen Properties Inc. is redeveloping Covina Town Square, a 422,000 sq. ft. power center in Covina. A 30-screen AMC Theatres complex will be built in place of a demolished Sears location, due for completion by Christmas. The center is anchored by Home Depot.
* Earlier this year, Costa Mesa, Calif.-based Arnel Retail Group completed Metro Pointe at South Coast, a 385,000 sq. ft. shopping and entertainment district in Costa Mesa, Calif. The development features Nordstrom Rack, Edward's Theatres, Barnes & Noble, Best Buy, Old Navy Clothing Co., Linens 'N Things, Mikasa Outlet, Starbucks Coffee and Marshalls.
* Dallas-based Patriot American has begun its $7 million renovation of the historic Phelan Building, a mixed-use location in downtown San Francisco. Upon its completion in mid-1998, the project's retail portion will encompass 75,000 sq. ft. and will be anchored by CompUSA. Other tenants include Starbucks Coffee, Eppler's Bakery and Wells Fargo. Negotiations for future tenants are ongoing.
* Bentonville, Ark.-based Wal-Mart will open its first two-level store in the United States at 369,670 sq. ft. Panorama Mall in Panorama City. Renovation of the 200,000 sq. ft. building is underway, with an expected completion of early next year. Wal-Mart will join LaCuracao, Food 4 Less, Pep Boys and Sav-On Drugs as tenants. The center is owned by The Macerich Co., Santa Monica, Calif.
* San Juan Capistrano, Calif.-based Jack Tarr Development has completed 332,448 sq. ft. Village Center in Victorville. The power center includes such tenants as OfficeMax, PetsMart, Best Buy, Toys "R" Us, Montgomery Ward, Casual Male Big & Tall, and L.A. Cellular.
* The Mills Corp., Arlington, Va., broke ground in April on CityMills at Orange, a 800,000 sq. ft. urban entertainment center. Developed in partnership with Atlanta-based Kan Am U.S., The City of Orange and The City of Orange Redevelopment Agency, the project will feature AMC 30 Theaters, Off Rodeo Drive, Just For Feet and Off 5th--Saks Fifth Avenue. It is due for completion next winter.
In partnership with San Mateo, Calif.-based DeBartolo Entertainment and Simon DeBartolo, Mills will break ground in 1998 on Candlestick Mills, a 1.4 million sq. ft. project adjacent to the new stadium project in San Francisco. The tenant roster includes Off 5th--Saks Fifth Avenue, American Wilderness, Virgin Megastore, The Sports Authority, Off Rodeo Drive, Gap Outlet, Group USA, The Athlete's Foot, Greg Norman Golf, 9 West, Just For Feet, Charlotte Russe, Reebok, Anchor Blue and Foozles. The center is due for completion by spring 2000, with the stadium opening in the fall.
Last November, Kan Am, Simon DeBartolo and Mills jointly opened Ontario Mills, a 1.7 million sq. ft. center in Ontario. The project is anchored by Off Rodeo Drive, Off Fifth--Saks Fifth Avenue, Mikasa Factory Outlet, Virgin Megastore, Bed Bath & Beyond, Burlington Coat Factory, Marshalls and JCPenney Outlet. Recent additions include GameWorks, which selected the center as its entry into the state of California, and American Wilderness Experience, which will debut in its entirety this November.
* Construction has begun on The Village at Newbury Park, a retail and entertainment center in Thousand Oaks. The center, owned by Southern California Association of Seventh-day Adventists, will open its 325,000 sq. ft. first phase next March. It will include Target and more than 200,000 sq. ft. of additional GLA.
* Los Angeles-based Pacific Theatres Realty Corp. has begun construction on Westminster Gateway Center, a 240,000 sq. ft., Wal-Mart-anchored project to be built on the former site of a drive-in movie theater. With an expected completion date in the first quarter of 1998, the center's confirmed tenants are Boston Market, Carl's Jr. and Mobil Oil.
* Newport Beach, Calif.-based Donahue Schriber is nearing completion of its renovation of Glendale Galleria in Glendale. The 1.3 million sq. ft. center's upgrade will include marble, sandstone and granite tiling; mahogany benches; palm trees; and wood and stone flooring. The improvement project is due for completion next month. The company also has proposed Glendale Town Center, a 500,000 sq. ft. urban entertainment center to be built adjacent to Glendale Galleria. The project will include a 100,000 sq. ft., multi-screen cinema; entertainment retail; themed and fine dining restaurants; and an open-air public park.
Donahue Schriber also has broken ground on 560,000 sq. ft. Natomas Marketplace in Sacramento. The project is due for completion next spring and will feature such tenants as Home Depot, Wal-Mart, Staples, PetsMart, In-n-Out Burger, Ross Dress For Less and Shell.
* The Voit Cos., Woodland Hills, Calif., and Westlake Village, Calif.-based Selleck Development Group Inc. are jointly developing The Plant and Van Nuys Center at the Plant, a 68-acre, mixed-use development in Van Nuys. Work began this summer for the project, which sits on the former site of a General Motors plant. Tenants for the project include Home Depot, Mann Theater, Babies "R" Us, Ross Dress For Less, OfficeMax, Party City, Mode Five Clothing, Famous Footwear, RadioShack, Sally's Beauty and Chief Auto Parts. Completion has been set for spring 1998.
* TrizecHahn Centers Inc., San Diego, has begun a $12 million, three-phase remodeling and remerchandising of University Towne Centre, a 1 million sq. ft. center in San Diego. During the project's first phase, the food pavilion will be connected to a new, outdoor patio. During phases two and three, scheduled to begin in January 1998, the food pavilion will be remodeled, and several department stores will be expanded.
TrizecHahn is planning Hollywood & Highland, a $145 million project to center around the redevelopment and expansion of Hollywood's landmark Chinese Theater. The project would include the addition of a 12-screen Mann Theatres complex and a Babylon Premiere Theater; 135,000 sq. ft. of studio and specialty retail; 100,000 sq. ft. of entertainment GLA; 70,000 sq. ft. of restaurants and food courts; and 210,000 sq. ft. of common area GLA. The proposal will be submitted to the city for review in November.
TrizecHahn and The Yarmouth Group, New York, are redeveloping 1.2 million sq. ft. Valley Fair Shopping Center in Silicon Valley. Features of the redevelopment include new interior flooring, lighting, seating areas and landscaping. The redevelopment will include 15 new stores, including Pottery Barn, Banana Republic, Charles David Shoes, Talbot's Petites, KTEH Store of Knowledge and Colorado Pen. The project is due for completion before Christmas.
* Next month, a 270,000 sq. ft. expansion and renovation will be completed at Fashion Valley in San Diego. Managed by The Yarmouth Group, New York, the new addition will house such tenants as J. Crew, Brooks Brothers, KPBS Store of Knowledge, Kenneth Cole, Restoration Hardware, B.C.B.G., Abercrombie & Fitch, Gap Kids and Bally of Switzerland. Nordstrom also is planning an expansion of its 150,000 sq. ft. store -- a project that will add an additional 70,000 sq. ft. of GLA upon its completion sometime in 1999.
* Long Beach, Calif.-based Newman Properties is redesigning 850,000 sq. ft. Mall of Orange Shopping Center in Orange. The project, to be completed sometime in the first quarter of 1998, includes a new mall entrance and reconfigured shop space. Wal-Mart and Ross Dress For Less will join the center's existing tenant roster, along with Todai Restaurant.
* Regent Properties, Beverly Hills, Calif., in partnership with the City of Glendale and Pasadena-based Tolkin Group, is building Glendale Marketplace, a 160,000 sq. ft., open-air entertainment center in Glendale. Upon its mid-1998 completion, the center will feature Mann Theatres, Linens 'N Things, Old Navy Clothing Co. and WOW!.
* West Los Angeles-based Champion Development Group has opened One Westside Place, a 300,000 sq. ft., vertical power center in Los Angeles. With amenities such as multi-colored awnings, an aquatic theme and sidewalk cafes, the center is anchored by Marshalls and Linens 'N Things. Other tenants include Pagenet, Noah's Bagels, Starbucks Coffee, Baja Fresh, Robeks Juice, Pella Windows and Quizno's.
* San Francisco-based Catellus Development Corp. is planning an urban entertainment project in the Mission Bay area of San Francisco. The 400,000 sq. ft. retail and entertainment project will feature such tenant categories as a multiplex cinema, a large-format bookstore, restaurants and specialty retail. The development, set for completion by mid- to late-2000, will sit across from the new San Francisco baseball stadium.
* The Krausz Cos. Inc., South San Francisco, is renovating 1.2 million sq. ft. Puente Hills Mall in City of Industry. The project includes new exterior entrances and a graphics package, as well as a 350-seat food court and a 20-screen AMC Theater. The renovation is due for completion by fall 1998.
* San Diego-based Oliver McMillan L.L.C. is in preplanning for Queensway Bay, a 350,000 sq. ft., open-air specialty center. The project, tentatively due for completion in fall 1999, will be an adjunct to the redeveloped Pine Avenue Retail District. Groundbreaking is due to commence next summer or fall.
The company also is planning Downtown Vista, a 350,000 sq. ft., open-air, mixed-use center. The project is slated to include a cinema, water park, extensive retail, and multi- and single-family housing. The project's estimated date of completion, with a summer 1998 groundbreaking, is fall 1999.
* J.L. Management Co., San Clemente, Calif., is nearing completion on 324,000 sq. ft. Cal Oaks Plaza in Murietta. The center features Albertsons, Carls Jr., Blockbuster Video, Unocal, Chief Auto Parts, Super Cuts and Postal Connections. In August, SoCal Cinemas joined the center with a 17-screen theater.
* Los Angeles-based Westfield America Inc. has remodeled 1.3 million sq. ft. Mission Valley Center, a superregional center in San Diego. The center has added such big-box tenants as Nordstrom Rack, Loehmann's, Michaels and Bed Bath & Beyond, as well as restaurants Wolfgang Puck Cafe, Canyon Cafe and Junior Seau's Sports Bar. The center was given new paving materials, outdoor amenities, large shade canopy structures, banners and graphics.
* Calabasas Hills, Calif.-based Westrust recently purchased and is planning a redevelopment of 171,754 sq. ft. College Square shopping center in Cerritos. Many of the center's existing tenants -- including anchors Home Depot and LA Fitness -- will be expanding and/or relocating. The center's renovation is due for completion by next spring.
* General Growth Properties Inc., Chicago, is adding Target as the newest anchor for New Park Mall in Newark. The store is due for completion by spring 1998. The 1.2 million sq. ft. mall is anchored by Sears, Macy's, Mervyn's and JCPenney, and is home to 130 specialty shops.
West Valley Mall in Tracy in undergoing an expansion, which will add a 83,000 sq. ft. Sears and 2,000 sq. ft. of common area GLA. The project is due for completion next month and will stretch the center's GLA to 774,000 sq. ft.
* Phoenix-based Vestar Development Co. has broken ground on 425,000 sq. ft. Rancho San Diego Towne Center, an open-air center scheduled for a May 1998 completion. The project, to be located in the community of Rancho San Diego, will feature Target, Edward's Theatres and Lucky/Sav-On Drugs. The project has space earmarked for a 14-acre wildlife preserve as well as a 40,000 sq. ft. YMCA recreational center.
Vestar also has begun work on Glendale Fashion Square, a 250,000 sq. ft. center in Glendale. Upon its completion by September 1998, the center will include Ralph's Supermarket, Long's Drugs, Best Buy, Barnes & Noble, Cost Plus, Ross Dress For Less, Petco and a 10,000 sq. ft. food court.
Construction also has begun on Vestar's Long Beach Town Center, a 920,000 sq. ft. retail and entertainment complex in Long Beach. The project, due for completion in July 1998, will be anchored by Ross Dress For Less, Sam's Club, Staples, Barnes & Noble, PetsMart, Linens 'N Things and Edward's 26 Theaters.
Expansion work has begun on 90,000 sq. ft. Norwalk Entertainment Center, a community center Vestar owns in Norwalk. The project will add 30,000 sq. ft. to the center's GLA and will feature an expanded AMC Theater and a new food court. The expansion is set for an August 1998 completion.
Work is complete on phase III of Cerritos Towne Center, Vestar's 725,000 sq. ft. Power Center in Cerritos. The center's expansion, which stretched the center's GLA by 125,000 sq. ft., included Best Buy as a new tenant.
* Canyon Lake, Calif.-based Hub Enterprises has begun work on Newport Hub, a 200,000 sq. ft. community center in Menifee. The center, which is part of a 55-acre, masterplanned development, is due for completion next summer. Tenant negotiations are ongoing.
* Century City, Calif.-based Mission Village L.P. has begun first-phase construction on Mission Village Plaza in Riverside. The community center, upon completion next spring, will be tenanted by Texaco Star-Mart and will eventually be built out to a total of 200,000 sq. ft. Phase II of the development, scheduled to begin this fall, will include additional out-parcel and anchor tenants.
* Mill Valley, Calif.-based Sunrise Penguin Saratoga L.P. is nearing completion on the redevelopment of El Paseo de Saratoga, a 340,569 sq. ft. center in San Jose. The center, anchored by OfficeMax and AMC Theaters, has added a newly constructed Lucky/Sav-On Supermarket, plus Noah's Bagels, Crown Books, Peet's Coffee, The Jungle and REI. The center is managed by Shelter Bay Retail Group, Mill Valley, Calif.
* San Diego-based LandGrant has completed renovation and expansion of Clairemont Town Square, a 517,597 sq. ft. center in San Diego. New tenants include Burlington Coat Factory, Pacific Theatres, Crown Books and PlayCo Toys; Michael's was expanded and remodeled.
LandGrant also is planning International Gateway of the Americas, a 500,000 sq. ft. outlet and entertainment center located near the San Diego/Tijuana Port of Entry. The project, due for completion in spring 1999, will include factory outlets, entertainment venues, themed restaurants and approximately 300,000 sq. ft. of retail. No groundbreaking date has been set.
* Atlanta-based Lennar Partners is planning Crossroads Marketplace at Chino Hills, a 759,000 sq. ft. retail and entertainment center in Chino Hills. Price-Costco has purchased a 137,000 sq. ft. pad site, which is already under construction and is scheduled for completion in November. Construction for the entertainment and retail portion of the center is slated to begin in the first quarter of 1998, with a scheduled completion in the third or fourth quarter of 1998.
* The Newhall Land and Farming Co., Valencia, Calif., is building 800,000 sq. ft. Town Center Drive, a pedestrian-oriented, mixed-use main street development in Valencia. The project, set for completion late next year, is anchored on its east end by Valencia Town Center, a 790,000 sq. ft., enclosed regional shopping center. Town Center Drive's current tenant roster includes Edwards IMAX 3-D theater and a 12-plex cinema, a 250-room Valencia Hyatt Hotel and Santa Clarita Conference Center, Borders Books & Music, and B.J.'s Pizza, Grill and Brewery.
* The Irvine Co., Irvine, Calif., breaks ground this month on the second phase of Irvine Spectrum Center, a 250,000 sq. ft. entertainment center in Irvine. The expansion, scheduled for completion by July 1998, will be anchored by Dave & Buster's. The project will double the center's GLA to 500,000 sq. ft.