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San Fernando
Wednesday, Apr 17, 2024

Retail

retail/kanter/20inches/1stjc/mark2nd By LARRY KANTER Staff Reporter L.A.’s economic rebound has sparked a flurry of retail development in the northern San Fernando Valley the first such activity in almost a decade. “There is six or seven years of pent-up demand for new space on the part of retailers,” said Frank Marino, a retail broker in the Sherman Oaks office of Grubb & Ellis Co. “As far as retail space goes, the Valley is pretty old and tired. The demand for good space is extremely strong.” By “good space,” Marino is referring to the huge suburban power centers favored by national “big box” retailers, and that’s exactly what neighborhoods like Northridge and Granada Hills are getting. No fewer than five such centers are planned or under construction. They include: – The University MarketCenter, a 20-acre, 220,000-square-foot upscale shopping center, planned for the north campus of Cal State Northridge. – The Granada Hills Town Center, a 200,000-square-foot project under construction at the site of the former headquarters of Coast Federal Savings at Chatsworth and Zelzah streets. The development, which is almost entirely leased, will include Orchard Supply Hardware, Ralph’s supermarket, Office Max and several fast food restaurants. – L’Plaza de Northridge, a 165,000-square-foot power center on Lindley Street across from the Northridge Fashion Center, which will be anchored by Gelson’s supermarket and Linens ‘n Things. – Some 356,000 square feet of new retail space which is expected to include Office Max, Home Depot and Babies “R” Us stores at the site of the former General Motors plant in Van Nuys. – A 660,000-square-foot retail development at Porter Ranch. The projects comprise more retail activity than the area has seen since the last development boom in the mid-1980s. It’s also a sign, brokers say, that the rest of the Valley is catching up with Burbank and Glendale as real estate hot spots. Thanks to the fast-growing entertainment companies in the East Valley, “people are back to work,” said Marino. “The entire Valley is positively revitalized.” But with so much development happening so fast in such a small area, do developers run the risk of cannibalizing each other? Not likely, said Allen Young, a senior vice president at the Sherman Oaks office of CB Commercial Real Estate Group and principal leasing agent for the Granada Hills Town Center and L’Plaza de Northridge. Rather than overlapping, the various developments will tend to “complement” each other, said Young. They also serve different market areas areas that have until now been underserved. Marino, however, wasn’t so sure. “There is going to be some fallout,” he predicted. In the office products market alone, Marino said, Northridge will have an Office Max, Office Depot, Staples, and warehouse outlets like Price-Costco and department stores such as Target and K-Mart all in the same area. “All of those retailers will not make it,” he said. “There’s going to be a big shakeout.” Despite what happens to the national chains, the new developments almost certainly are not good news for small, mom-and-pop retailers in the area, especially those on struggling shopping strips like Reseda Boulevard and Chatsworth Street. “With all the big boxes that are coming in, if you are not a good merchandiser, you may not survive,” said Young. “It’s going to be really difficult.” The CSUN and Porter Ranch projects already have triggered unease among local merchants, many of whom are still feeling the effects of the 1994 Northridge earthquake and are fearful of added competition. Business owners in Northridge have complained that the laws of supply and demand should dictate whether more retail space is developed. The problem for small, family-owned businesses, real estate brokers say, is that they no longer reflect the way most people prefer to shop. Today’s shoppers, they say, are looking for convenience, easy parking, good values and an all-around shopping “experience” things that old-fashioned storefronts are unable to provide. The merchants that survive will be those that provide outstanding customer service or service a specific, well-developed niche, said Young. Other than that, added Marino, “There are going to be a lot of vacancies in the older storefront places.” Despite the pressures the new chain stores put on neighborhood shopping districts, Walter Prince, a board member of the Northridge Chamber of Commerce, said the developments are good news for the area. “It’s certainly healthy to have them here,” said Prince. “It’s encouraging that these major national chains are no longer frightened of coming Northridge.”

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