County Retail Space Seen to Be Growing at Well-Balanced Pace
Bucking the regional trend of top national retailers seeking to crush competition by opening dozens of stores, Ventura County’s retail sector is growing at a more balanced pace, industry analysts say.
However, the current market could overheat in the western part of the county if retail construction continues.
In a rush to increase market share, big-name retailers are descending on Southern California--a trend that worries industry experts who fear the boom is saturating an already cramped market and could send retail real estate into a tailspin.
“What’s going on [in Los Angeles and Orange counties] is that they’re building faster than they can fill up the space,” said Ed Flaherty, a retail specialist for the research firm F. W. Dodge in Massachusetts. “That’s got a lot of people uneasy.”
But projects either planned or under construction in Ventura County are proceeding at a slightly slower pace. Most of the construction is occurring in the east county communities of Simi Valley and Newbury Park, both of which have had little retail expansion during the past five years and can better absorb the additional business.
Since the mid-1970s, California has become a retail mecca--with more retail space than any other state in the nation.
According to the New York-based International Council of Shopping Centers, the Golden State has more than 12% of the nation’s total retail space, with 5,774 shopping centers comprising more than 663 million square feet.
Since 1990, new construction increased the amount of retail space in Los Angeles County by almost 25% and by 15% in Orange County, according to analysts at F. W. Dodge.
In Ventura County, construction during the same period has increased retail space by slightly more than 7%.
Analysts are concerned about speculative developers who build retail centers before they find the tenants to fill them.
If a center fails to lock in long-term tenants, vacancy rates increase, driving down rents throughout an area. This forces venture capitalists to recoup their losses by looking for newer markets elsewhere.
“It’s a domino effect that really takes its toll,” Flaherty said. “That’s when you start to see these empty buildings.”
There are about seven retail centers underway or scheduled to begin construction, totaling about 874,000 square feet.
Simi Valley, where retail growth has been dormant for much of the decade, has more than 362,000 square feet currently under construction.
Developer Robert Selleck, is about midway through his Civic Center Plaza project, a 54,000-square-foot center that is set to include a 16-screen movie theater, the city’s first Starbucks coffee outlet, several chain restaurants and retail shops.
In addition, the county’s second Wal-Mart will be built as part of the 308,000-square-foot Simi at the Plaza development. That project, which should be completed early next year, will also include a Home Depot and PetsMart.
Newbury Park has a 120,000-square-foot project that will house a relocated Home Depot. A tenant for the Home Depot to be vacated on Ventu Park Road has not been found.
“It’s been pretty quiet out there over the past few years, and what’s going on is pretty dynamic,” said Reed Henkelman, a retail specialist for CB-Richard Ellis Inc., a commercial real estate firm. “I’m more concerned about what’s happening in the west county.”
By comparison, cities such as Ventura, Oxnard and Camarillo have experienced fairly consistent retail growth in the past five years.
Analysts believe consumer demand has been met and that additional development may weaken the market for retailers and commercial real estate.
Beginning late next year, Camarillo will add a 220,000-square-foot shopping mall near the Edwards Theaters, and developers are ready to break ground on a 12,000-square-foot retail center near the financial towers in Oxnard.
The Buenaventura Mall in Ventura is undergoing a major face-lift, expansion and name change--to the Pacific View Mall. The $100-million project will nearly double the size of the mall to 1.26 million square feet and include Sears and Robinsons-May as two new anchor tenants.
“These are all pretty big projects, and there’s already been pretty consistent growth there over the past few years,” Henkelman said. “It’s going to make it more difficult for existing stores because they’re going to have to compete with these new retailers.”
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