WESTERN SNAPSHOT, SEPTEMBER 2004
East Bay Retail Market
Retail construction throughout San Franciscos East Bay
continues to be driven by big box tenants. Investment
in retail properties is strong and construction remains active,
comprising several freestanding big box developments, new
community and neighborhood centers, and infill redevelopment/repositioning
opportunities, says Jeffrey Mishkin, regional manager
at Marcus & Millichap.
The no vote to Measure L, a Contra Costa County referendum
that would have limited retail store size to 90,000 square
feet or less, was key to the development of planned super
centers. Also, due to persistently high vacancies, many office
and industrial sites are being re-entitled, creating new retail
Marcus & Millichap
Retail activity in the once overlooked city of Oakland, California,
is on the rise again. The redevelopment of the Eastmont
Town Center is significant, considering the low-income demographic
of the trade area, says Mishkin. Elsewhere, Cinema Place
in Hayward, California, is acquiring prominent tenants, and
Regency Centers is rebuilding and expanding the ailing Alameda
Bridgeside shopping center.
Mishkin reports that new retail development remains concentrated
along the Interstate 80 corridor, from Emeryville all the
way to Solano County, and the Interstate 580 and 680 corridors
in towns such as Dublin and Pleasanton. Rooftops are
driving the new construction along with East Bay consumers
who continue to maintain healthy spending levels, he
says. Infill development is a mix of new construction
and rehabilitation. Fruitvale Transit Village, built
at a Bay Area Rapid Transit depot, is an example of new construction
while Jay-Phares Corp. is redeveloping Foothills Square shopping
center into a lifestyle center.
Ross Dress For Less plans to open its discount concept, dds
Discounts, in three locations between Oakland and San Leandro.
The Home Depot has opened its first store in Oakland, marking
the debut of its new layout in the East Bay market. Wal-Mart
will open its first store in Oakland, and Talbots is
expanding with the opening of a flagship store in Walnut Creek.
Kohls is the newest retailer in the East Bay market.
At 8 percent, East Bays retail vacancy continues to
improve with traditional shopping centers outperforming urban
retail properties. Mishkin expects rates in the mid-7 percent
range by years end. Vacancy is lowest in east Alameda
and central Contra Costa counties.
The investment market remains strong and construction active.
[There is] tremendous demand for anything that looks
or smells like retail, says Mishkin. From an operating
standpoint, the retail sector has significantly outperformed
other property types.
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