2-Story Mini-Malls Seen as Shopping Center Trend
A national real estate firm is predicting that 2-story mini-malls with underground parking will lead a surge of new shopping center development in the Westside during the next 15 months.
The firm, Grubb & Ellis Commercial Real Estate Services, said in a study released this week that more than a million square feet of retail development is planned or under construction at 32 locations throughout the Westside.
Those figures do not include the 300,000 square feet of retail space planned for mixed-use Hollywood Promenade in Hollywood, which is being reviewed by the Los Angeles Planning Department, or the 800,000 square feet of space planned for Marina Place Mall in Culver City, which is expected to break ground late next year.
New Retail Space
(Los Angeles city officials and a Venice homeowners group have filed suit against Culver City hoping to halt the development of Marina Place because of anticipated traffic problems.)
About 580,000 square feet of new retail space is expected to be completed by the end of this year, the report said. Another 450,000 square feet of retail space is expected to be built by the end of next year, with most of it completed in the fall of 1989.
Although much of the development will be in major shopping centers, John Carpenter, senior vice president and district manager of the firm’s West Los Angeles office, said most of the future retail centers will be 1- to 3-story mini-malls.
Carpenter said about 410,000 square feet of space in 21 strip centers is either under construction or in the planning stages. The average size of a center will be about 20,000 square feet.
He said that because of a growing concern among residents and elected officials over traffic, many cities are starting to require more parking spaces for mini-malls. That, combined with increasing land costs, is forcing many developers to build 2- and 3-story retail strip centers.
“Even if a developer has secured the land, parking constraints are making it more difficult for developers to make their projects pencil out,” Carpenter said.
Choice of Locations
Tam Antebi, a retail leasing specialist with Grubb & Ellis, said the increasing number of strip centers is allowing tenants to pick their location.
Antebi said new centers offer tenants two to three months free rent, a choice of locations within the center and generally more parking spaces for customers.
Although older centers limit where tenants may locate, they offer a tenant mix with an established customer base and usually lower rents, she said.
Two- and 3-story centers allow tenants with service-oriented businesses, such as hairdressers, or those with established customers to be at prime locations at lower rents than ground-level tenants.
The Marina del Rey/Culver City market is experiencing the most construction activity, with more than 400,000 square feet of retail space under construction. That figure includes the 250,000-square-foot Marina Market Place, a community shopping center scheduled to be completed by the end of the year.
The Hollywood/West Hollywood market is second with about 200,000 square feet of retail space being built.
