Refurbished Sherman Oaks Galleria Still Searching for Its Retail Identity
By SHELLY GARCIA
San Fernando Valley Business Journal
A “lifestyle center” is not to be confused with a shopping center and that continues to be a challenge for Sherman Oaks Galleria.
The recent closure of Prego, a higher-end Italian restaurant, has brought the vacancy rate at the redone center’s retail component to 26 percent and follows the exit of Cupid’s, one of the smaller eateries in the complex, and Aida Gray, a hair salon. By comparison, the office segment at the Galleria is 90 percent occupied.
Costly rental rates, a soft economy and what many merchants consider to be an as yet untested concept have made the retail portion of the complex a harder sell to tenants.
“Many of the retailers we were talking about have been of the mind that this is not a regional shopping center, and it doesn’t have the anchor tenants we can draw from,” said Allan Golad, director of property management at Douglas Emmett & Co., the landlord for the complex. “While we have great traffic counts there’s been some apprehension in moving forward with something that doesn’t fit the mold.”
The Galleria, a one-time traditional shopping mall, was rebuilt in 2001 as a “lifestyle center,” a concept designed to provide a variety of leisure time activities instead of shopping. The complex is anchored by a 16-screen movie theater and has a number of small and large eateries, along with a fitness center, a day spa and Tower Records.
In the evenings and on weekends, some visitors still arrive at the Galleria expecting a shopping mall.
“The one complaint people have is after the movie and restaurant, where do they go next?” Golad said. “How many times can you go into Tower? So we need more retail opportunities.”
A new hair salon is set to come into the center to replace Aida Gray. And Golad said the company is close to a deal to sign a shoe retailer and an apparel retailer.
“That really is the stimulus we need to start getting more tenants in place,” Golad said. “If those two deals happen, then I think we’re going to start to see more of what we think we need in terms of critical mass for retail.”
Coleen Kirnan, whose firm was brought on by Douglas Emmett earlier this year to market the retail space, said she has had discussions with about 15 restaurants. “I really want to see a fun entertainment venue that caters more to families,” she said.
Golad and others say that the problems with Prego, one of the larger restaurants in the complex, were not related to the venue. “Prego had management issues, had price-point issues and frankly, I think the level of improvements weren’t commensurate with the prices,” Golad said.
Aware that its formula, an upscale Tuscan restaurant with a varied and pricey wine list, was not well suited to the tastes of the families that frequent the Galleria, the restaurant last December tried to revise its menu.
The Galleria’s two other anchor restaurants, The Cheesecake Factory and P.F. Chang’s China Bistro, have done well in the location.
