The numbers don’t lie: California continues to rise — in population, real estate prices and its minority population. With 30 percent of the state’s residents in Los Angeles County alone, it’s no surprise to see it on the list of California’s hottest retail markets. And despite its post-dot-com woes, San Francisco still captures hearts. The no-brainers aside, there is at least one town, a former agricultural community down south, that should start to register on the retail radar screen, if it hasn’t already.
This story first appeared in the January 22, 2004 issue of WWD. Subscribe Today.
Projected population by 2010: 1,370,328
Median home cost: $390,000
Sample retail sales per square foot: $400-$700 in the Gaslamp Quarter and almost as high in nearby Little Italy.
Average retail rent PSF: $36
Median household income: $45,733
African-American: 8 percent
Asian: 14 percent
Latino: 25 percent
White: 60 percent
The lowdown: New development and ongoing business opportunities from a continuously strong tourism market mean that more than the downtown trolley system and rail transit are keeping San Diego’s economic wheels turning.
New projects: An estimated $1 billion in downtown construction is under way, including loft-style condos, the 46,000-seat Petco Park (new home to the Padres), the continued gentrification of the Gaslamp Quarter, a 32-story Omni Hotel and the expansion of two nearby malls.
FYI: San Diego ranked first on the Forbes list of 150 “Best Places for Business and Careers” in 2002, the last year a California city cracked the top 10; it ranked 27th in 2003.
Projected population by 2010: 4,143,532
Median home cost: $333,000
Sample retail sales PSF: $425 in the Fashion District.
Average retail rent PSF: $27 to $42
Median household income: $36,687
African-American: 11 percent
Asian: 10 percent
Latino: 46.5 percent
White: 46.9 percent
The lowdown: “There is a lot of residential development going on right in downtown, and retail-wise you really don’t have that much that’s different and unique. It’s a lot of rental units now but you’re starting to see some condos for sale, starting at about $1,300 a month — and that’s not a downscale demographic,” observed Jack Kyser, chief economist at the Los Angeles County Economic Development Corporation.
New projects: The Walt Disney Concert Hall, the new Roman Catholic cathedral and the Downtown Standard Hotel join the Staples Center in making the once-deserted-after-dark downtown a destination. The Los Angeles Business Journal forecasts 2,800 new residential units to open downtown by the end of 2004, and a development at Ninth and Flower Streets (opening in 2005) will include a 50,000-square-foot Ralph’s grocery store and other retail.
FYI: Los Angeles ranks 126th on the 2003 Forbes list of 150 “Best Places for Business and Careers.”
Projected population by 2010: 787,500
Median home cost: $574,000
Sample retail sales PSF: $525 in the San Francisco Centre Mall.
Average retail rent PSF: $100 in Union Square and slightly lower in the adjacent area.
Median household income: $55,221
African-American: 8 percent
Asian: 31 percentLatino: 14 percent
White: 50 percent
The lowdown: Downtown is making a comeback, say economists.
New projects: The $410 million San Francisco Centre/Emporium project broke ground last November and is slated to open in 2006. It is the biggest urban retail project in the western United States, and anchor tenants include the country’s second-largest Bloomingdale’s, Nordstrom, several hundred stores and restaurants and a nine-screen cineplex.
FYI: San Francisco ranked 76th on the Forbes list of 150 “Best Places for Business and Careers” for 2003.
Projected population by 2025: 227,400
Median home cost: $320,000
Sample retail sales PSF: $295 average in West Coast mall.
Average retail rent PSF: $39
Median household income: $60,931
African-American: 8 percent
Asian: 6 percent
Latino: 28 percent
White: 67 percent
The lowdown: “There’s a lot of development going on out in the San Bernardino County area, along the 210 Freeway corridor,” noted Kyser. Consider that the population this year alone has already eclipsed the 10-year projection.
New projects: The Victoria Gardens Regional Mall project includes about 1.3 million square feet of retail (anchors are Robinson’s May and Macy’s West) and office space, 14 acres of peripheral retail area and 20 acres of multifamily housing.
FYI:Rancho Cucamonga is now practically a suburb of L.A., and it was the seventh-fastest growing city in America in 2002, increasing at a blistering 12.5 percent from 2000 to 2002. Marcus & Millichap listed the Inland Empire among its top-10 retail markets nationwide.
Projected population by 2010: 489,826
Median home cost: $257,500
Sample retail sales PSF: $166 in Towne Center.
Average retail rental PSF: $21 to $33
Median household income: $37,270
African-American: 15 percent
Asian: 12 percent
Latino: 36 percent
White: 45 percent
The lowdown: “Long Beach has reinvented itself. It has a lot of residential [units] downtown — and more are being developed,” said Kyser, adding that a convention center and hotels make it ideal for midsize conventions. “There’s some retail opportunity there.”
New projects: The Pike at Rainbow Harbor, 18 acres on waterfront between the convention center and the Long Beach Aquarium, is 312,609 square feet of restaurants (California Pizza Kitchen and P.F. Chang’s among them), entertainment venues and a 14-screen movie theater. More than 4,000 new housing units are under construction in the downtown area. Cityplace, completed in 2002 on the site of the former Long Beach Plaza, boasts 450,000 square feet, including a Wal-Mart, a Ross Dress for Less and more than 300 residential units.
FYI: In 2003, Carnival Cruise Lines opened a terminal adjacent to the Queen Mary, becoming the first cruise line to operate from the city.
Sources: List of cities suggested by Jack Kyser, chief economist at LAEDC.
Current population and ethnicity information (which is rounded up and therefore may add up to more than 100 percent) taken from the 2000 U.S. Census. Population projections for Los Angeles and Long Beach, courtesy of the Southern California Association of Governments. Population projection for Rancho Cucamonga from the Federation for America’s Immigration Reform. The population projection for San Diego is courtesy of the San Diego Association of Governments. The population projection for San Francisco is courtesy of the California Department of Finance.
Median home costs information is as of November 2003 and reported by DataQuick Information Systems.
San Diego sales PSF information provided by MarketPoint Realty Advisors director of economic research Alan Nevin. San Diego rental rate PSF from “National Real Estate Investor” dated Dec. 1, 2003. Los Angeles and Long Beach, retail rental rate PSF provided courtesy of Brian Mericle, investment broker at Marcus & Millichap, Los Angeles. Los Angeles sales PSF courtesy of the Fashion District. Long Beach sales PSF from figures provided by City of Long Beach Economic Development Department. San Francisco rents and retail sales PSF from Retail Traffic Magazine April 1, 2003. Rancho Cucamonga sales PSF, based on estimated ICSC Pacific Division average; PSF rental cost estimated for the Inland Empire by Marcus & Millichap as reported in the San Gabriel Valley Tribune, May 23, 2003.