With a diverse portfolio of leasing and managing assignments, our Coreland teams are faced with a variety of common issues specific to Southern California retail daily. Quarterly we present the statistics through our Quarterly Retail Roundup, and consult our ‘boots-on-the-ground’ for their view of the marketplace. This quarter we asked Executive Vice President Patrick Galentine and Regional Real Estate Manager Kindy Hohman, “What’s the buzz on retail?”
Patrick Galentine, Executive Vice President
In a recent interview with GlobeSt.com, Galentine shared that the Southern California retail market remains healthy, but extremely competitive.
“From both a management and leasing perspective, we’re keeping a close eye on the grocery sector and large-format retailers. The success of new store openings by Aldi, Grocery Outlet and Smart-and-Final, for example, are critical in maintaining a healthy absorption of space. Landlords remain cautious when it comes to the performance of any traditional retailer as ‘right-sizing’ efforts continue.”
He also explains that creating value and providing personal experiences through brick-and-mortar retail is still the top priority. “How can we enhance the experience for customers and create value for our clients is an ongoing discussion within our own management and leasing portfolios.”
Kindy Hohman, Regional Real Estate Manager
We continue to see an increase in the number of tenants eager to start the renewal process more than a year in advance. With the market continuing on an upward trend and vacancy so low, retailers understand that landlords have options. Most tenants are satisfied to renew with increases, but we have also seen many requests to add options or allowances for tenant improvements, neither of which has ever been common at this stage.
Renewal negotiations are an ideal opportunity to eliminate or renegotiate provisions in the lease that might be restricting overall leasing efforts or operations of the property. Landlords can rely on management teams to understand a tenant’s health and stability.