Retail Centers Proliferate in Santa Clarita Neighborhoods
By SHELLY GARCIA
San Fernando Valley Business Journal
A few years ago, you couldn’t give away land for retail development north of Valencia.
Today, at least 10 retail centers are in development in the Santa Clarita Valley, stretching farther from the Valencia commercial hub that is the traditional center of the community.
The outward housing push and a trailing business base have created brisk daytime traffic, which in turn has spawned an increase in consumer demand for retail centers. And the retailers are lining up for space.
“A couple of years ago, a couple of these sites would have been premature,” said Steve Hopkins, president of Hopkins Real Estate Group, which is developing five centers in the region. “In a couple of cases we closed (on the land) without tenants in place, but we were so confident in getting those tenants that we decided to do it.”
Most of the complexes under development are neighborhood centers, less than 100,000 square feet and anchored by supermarkets or drug stores. In some cases, they are only miles from each other. Despite the proximity, brokers report tenants are looking to make multiple deals, persuaded as much by the development yet to come as the building that already has taken place.
“It’s the traffic that drives past the center, the daytime population, and the residential population,” said Bert Abel, vice president of the retail group at Grubb & Ellis Co., who is marketing the Hopkins centers. “The more dense those factors, the higher the traffic counts, the closer together you can put those concepts.”
Until recently, the majority of workers spending their day in Valencia commuted from outside the area, and the majority of residents went elsewhere to work as well.
The City of Santa Clarita grew more than 30 percent during the 1990s, to 155,000, and is expected to increase by another 20 percent by 2010. The population in the wider Santa Clarita Valley, including unincorporated areas as far north as Castaic, is expected to increase to 271,467 by 2010, from the present 195,000.
Of that burgeoning population, 50 percent work close to home.
“This is a master-planned area and you’re starting to see the retail response to master-planned level of rooftops,” said Larry Kosmont, president and chief executive of real estate consultancy Kosmont Cos.
Developers are drawn not only by an increase in households, but by the demographics of the anticipated newcomers. Many of those moving to the region are younger families with median household incomes of $70,000 and more.
“Suburban communities also tend to have younger populations with growing families, so they hit a sweet spot in a retailer’s demographic,” Kosmont said.
The combination of residential and commercial traffic has been sufficient to attract a second Home Depot and a second Target store, and other national companies are turning their sights to the area as well.
“I think developers and tenants recognize that it’s critical to get a foothold in a well-located center within a community with anticipated growth,” said Mac Chandler, senior vice president at Regency Centers, a Jacksonville, Fla.-based developer with 23 properties in Southern California. “I think the long-term growth prospects are what’s most appealing. Tenants see Valencia like they saw the Irvine Ranch in the ’60s.”
One such retailer is Kohl’s, which has signed on for 88,000 square feet at Valencia Crossroads, a 17-acre, $35 million center Regency is developing at Valencia Boulevard and McBean Parkway.
It’s not just the big box retailer that’s drawn to the market. Smaller shopping centers housing dry cleaners, grocers, nail salons and other retailers serving area residents are cropping up.
Among the new neighborhood centers, two are located where residential and daytime populations are most dense. Valencia Town Center, a 9,600-square-foot retail complex with adjoining apartments is under development by Hanover Financial Co at Town Center Drive and McBean Parkway. Promenade at Town Center, a 184,000-square-foot grocery-anchored center at McBean Parkway and Magic Mountain Parkway, was recently completed by RKR Inc.
Hopkins has surrounded the Town Center area, a commercial hub, with a handful of projects.
– River View Place, a 45,000-square-foot center at Via Princessa and Sierra Highway, expected to open in June 2003;
– Valencia Village, a 30,000-square-foot center at Newhall Ranch Road and Dickason Drive, due to open in April 2003;
– Highridge Crossing, a 70,000-square-foot center at Copper Hill Drive and Newhall Ranch Road, also slated to open in April 2003;
– Seco Canyon Plaza 1 and 2 at the southeast and southwest corners of Seco Canyon Road and Copper Hill Drive, respectively, totaling 74,000 square feet. The first phase of the development just opened, the second is set to open in June 2003.
In addition, Intertex, a Valencia developer, is building Castaic Plaza, a 40,000-square-foot center at Lake Hughes Road and Interstate 5, set to open in June 2003; and Regency is developing Westridge Village, a 100,000-square-foot center at Valencia Boulevard and Interstate 5, which will be anchored by Albertson’s. That complex is also expected to open in the summer of 2003.