L.A. Retail Appeal Ebbs as Vacancies Creep Up in 2002
Retail by Deborah Belgum
L.A.'s status in the retail world has slipped a little bit at least according to one survey.
The city moved from 14th to 15th in the annual National Retail Index, an analysis of the nation's top 35 retail markets by Marcus & Millichap, a real estate investment brokerage firm. The index ranks market health based on employment forecasts, household growth, retail vacancies, retail construction, personal income, new home constructions and rents.
Washington D.C. ranked No. 1 with solid job growth in the government sector as the main reason. San Diego was No. 2 and Orange County was third due to job growth.
L.A.'s No. 15 ranking isn't necessarily that bad. One of the reasons is that retail vacancies inched up only 0.5 percent this year, to 5.8 percent. Asking rents are expected to rise 1.5 percent to 2 percent over last year.
"There's not a whole lot of new (retail) construction planned that puts pressure on landlords to lower rents," said Steve Stein, regional manager at Marcus & Millichap in Los Angeles.
In the next few years, shopping centers anchored by super markets or drug stores are expected to be the development of choice for investors.
The report also notes that discount retailers are continuing their expansion into Los Angeles County with Target and Home Depot leading the way.
The Beverly Center is ready for its close-up. After years of having its in-house staff coordinate filming at the mall, the company has hired Real to Reel Inc. in Van Nuys to promote the center more aggressively.
"We need someone to manage the filming program and screen the people interested in filming so we get the best possible productions," said Barbara Bach, marketing director for the Beverly Center.
Promoting the shopping center to Hollywood, she said, is a good marketing tool for attracting tourists. The center was featured in "Scenes from a Mall," with Bette Midler and Woody Allen, "Volcano" and "Selena."
Most shopping centers, such as Santa Monica Place and Westfield Shoppingtown Century City (formerly known as Century City Shopping Center), handle film requests through their in-house staff. The Glendale Galleria uses Hollywood Locations to handle requests for commercials, videos and film.
Junior apparel manufacturer Hot Kiss Inc. of Los Angeles is on a licensing roll.
After signing several agreements within the last year to license children's wear, swimwear, shoes, handbags, belts, and sunglasses, the company plans to sign an agreement soon to license watches.
"We're in negotiations with a perfume company too," said Hot Kiss owner and founder Moshe Tsabag.
Tsabag said he expects revenues from the six-year-old company to increase this year to $45 million from $32 million a year ago.
Staff reporter Deborah Belgum can be reached at (323) 549-5225 ext. 228, or at firstname.lastname@example.org.
For reprint and licensing requests for this article, CLICK HERE.