News
Luring Retail to OC
September 4, 2012
| Now that employment in the county is growing and consumers are opening pocketbooks (or whatever verb goes with Google Wallet phones), retail tenants are interested in opening more locations. For the 12 months ending in June, OC retail spending rose 4%, putting it at only 2% lower than peak levels before the recession, according to Marcus & Millichap. |
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| But that doesn’t mean that OC retail landlords have it easy. With a vacancy rate nearly 200 bps higher than the five-year average, it’s still a competitive environment. Retail landlords compete for tenants on several levels, RiverRock Real Estate Group’s retail practice leader Jim Lynch tells us. With a relatively small number of quality tenants seeking to make deals, it’s important to understand a tenant’s business model to ensure the deal works for both parties. (We have an idea for a wholesale magic supply store that would be perfect. We'll wait by the phone.) |
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| Standard strategies still have their place. Landlords can entice tenants with free or reduced rent, larger improvement allowances, expense stops, sales-based termination rights, and exclusives, Jim says. “However, the best way to attract quality tenants is to be able to show them that the existing tenants are succeeding.” (Positive testimonials are even better than a Kardashian endorsement.) Jim recently joined Newport Beach-based RiverRock to oversee its 3M SF Red Mountain Retail Group portfolio. |
