5 Things We Learned About San Diego Retail
From the types of spaces retailers want and what could be coming at Westfield UTC to the future of retailing and technology, here are five things we learned at our 2nd Annual San Diego Retail Real Estate event last week.
1. Retailers want "authentic" spaces
HP Investors' Sumeet Parekh (here) says retailers are seeking “authentic” retail spaces and “not your standard glass storefronts.” And that means investors may have to be willing to shell out more money for those places. Paragon Real Estate Investments' Roberto Jinich echoed that, and says an urban setting that is connected to an outdoor streetscape is even more critical.
2. Westfield Banking on Multifamily
Westfield SVP Jerry Engen (on far left with the rest of the panel of Roberto, Sumeet and Allen Matkins' Michael Holmes, who moderated) says the firm has started a residential division to capitalize on multifamily growth around the country. Especially since it ties so well into retail environments. Jerry says the company is looking into a number of residential opportunities in the city, perhaps most notably its plans for a 300-unit luxury apartment tower near the Macy's store at Westfield UTC in an unspecified future phase.
3. $500M-plus Westfield UTC Renovation Doubles Sales
Jerry also let slip this little tidbit about the first phase of UTC's renovation. Since 2011, a year before Westfield took over the regional mall and began re-tenanting and renovating it, sales were about $500/SF. This year? The mall retailers are doing an average of more than $1k/SF. “That's unprecedented growth,” Jerry trumpets. He credits proper curating of the best tenants for the rapid growth.
4. Tech Makes Urban Retail Work
“If you have retail spaces in the urban core, without technology such as Uber, Zipcar or the parking apps, the whole flow would be a lot more restrictive,” Roberto (here) says. Jerry says Westfield's lab division has been working to infuse tech and apps into its retail properties as a way to transition from being a strictly real estate firm to a customer-focused agency. Products include parking apps in the UK to a “Dine-On-Time” app that allows customers to choose an exact time for a meal to arrive at a restaurant in a Westfield property.
5. Self-Driving Cars May Be the Future of Real Estate Disruption
“We think that will definitely be a big impact on the regional mall business,” in the future, Jerry told our audience at the Hyatt Regency La Jolla. Jerry says he envisions cars dropping customers off and then programmed to drive elsewhere and pick them up later, reducing the need for on-site parking. He also says 3D printing could be a huge boon for retailers not having to keep as much stock in inventory. “The disruption is going to come from places we don't even know about,” Roberto quipped, but added historic properties will continue to attract retailers and shoppers alike.
CORRECTION: A photo that ran in yesterday's edition incorrectly identified Lena Evans as Dan Floit's spouse. The two are unrelated. Bisnow regrets the error.