Sneak Peek: Hottest Retailers for 2014
If you thought retail was on fire this year, wait until you see what's in store for 2014. (Is someone finally using our idea for an online store that sells bricks and mortars?)
Dick's Sporting Goods, Hobby Lobby, Stein Mart, and LA Fitness were the most active new market entrants to NorCal this year, retail expert John Cumbelich tells us. (Perfect for the jock who still sews his own jock strap.) Existing retailers who sped up their local growth this year include Golfsmith, Buy Buy Baby, the TJX brands (especially Home Goods), and Party City. The next wave of major national brands--Smart & Final, Jared, and Dunkin' Donuts--is going to take the market by storm starting in 2014, he predicts. Coastal cities like San Fran and LA have higher density and long-term employment, and as a result, are experiencing better momentum than non-coastal ones like Salt Lake City and Reno.
John's six-person firm is part of the North American X Team network, which had over $3B in deals in 2012; he expects to meet or beat that this year (he's snapped here with Owen Buckley, an X Team partner and prez of Lane4 Property Group in Kansas City). John started out in real estate in the '80s with what was then Coldwell Banker (today CBRE). After becoming one of their top salespeople, he left in 2000 to start his own shop. A third of John's biz is focused on downtown Walnut Creek, and he's sold more core, high-profile retail properties than any firm combined there. (He brought Apple, Tommy Bahama, and Tiffany's to The Corners.)
Now he's filling 1500 Walnut Creek (above), a nearby project under development with interest from strong, international brands. Shopping centers are also a big part of his biz. John brought Kroger to Oakland's Foothill Square; the grocer liked the market's high barriers to entry and that it's urban and ethnically mixed, with relatively lower income and education levels. "There's a lack of entrenched competitors," says John. The outdated '60s shopping center was redeveloped and filled with Ross and DaVita, and Kroger will open in the next 60 to 90 days. (Any supermarket built in a '60s center runs the risk of some Peaches & Herb being left in the produce section.)
Walmart has announced about five neighborhood market deals in the Bay Area, from 20k SF to 50k SF. The retail giant is waiting to see how those perform over the course of 2014 to adjust their growth plans, John tells us. (He repped the shopping center owner in the San Ramon store.) When he was a kid growing up in the East Bay, he recalls rolling down the aisles in similarly sized grocery stores. Now the days of 60k SF Safeways and 100k SF Super Targets are dwindling, and he's seeing stores getting smaller again (Grocery Outlet, Trader Joe's). Users want to sacrifice size for location to be closer to the core versus the edge of town.