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Saturday, Dec 2, 2023

Caruso Tenant Mix in Glendale Not the Usual

Walk into nearly any shopping mall and you’ll most likely see a lineup of retailers so similar you may not even know what city you are in. But there is no mistaking some of the Caruso Affiliated properties, and perhaps none will be more distinctive than Americana at Brand, the developer’s newest mixed-use complex under development in Glendale, where several retailers are debuting stores in Southern California or Los Angeles for the very first time. Caruso has put together a similarly distinctive retail lineup at The Grove at Farmer’s Market, but who would have thought that a shopping center in Glendale would get the first Abercrombie & Fitch new concept store in Southern California, the first Kate Spade boutique in Los Angeles or even the first Valley location for venerated oh-so-New-York boutique, Barney’s New York CO-OP? Retailers who have signed on to locate at the Americana say that the demographics of Glendale are well-suited to the high-fashion, trendy wares they sell. But how Caruso is able to assemble a tenant list widely considered the cream of the retail crop is also a testament to the developer’s track record and its approach to seeking tenants for its properties. “I think it comes down to merchandising and having the ability and talent to understand what tenants will work where,” said Todd M. Russell, senior vice president of leasing and marketing for Caruso. “We merchandise our properties. We don’t lease them. At shopping center REITs it’s really about filling the space and reporting to Wall Street.” Large regional shopping malls have historically been owned and managed by national, publicly-traded real estate investment trusts that focus on the financial aspects of their properties. For them, well-recognized national retail brands with established credentials and strong balance sheets are the ideal tenants, appealing to the largest common denominator of consumers while offering little risk that they will miss a rent payment or go out of business. Caruso, which cut its teeth on smaller, local shopping centers in the early 1990s, has emerged as an unusual player in the market in several ways. The company pioneered the idea of outdoor shopping centers where the draw can be dinner and a movie, an afternoon of people-watching among fountains and walkways or an evening of bar hopping as much as a destination for shopping. And it has developed a track record for attracting the most fashionable tenants, many of whom would never consider locating in traditional shopping malls. Not cookie-cutter The Grove counts American Girl Place, one of just three retail locations for the wildly successful publisher of children’s books and toys; nikewoman, one of only three Nike outlets in Southern California; and Baccarat the ultra-exclusive French crystal maker whose only other Southern California store is in Palm Desert. Still privately owned, the company’s revenues have grown by about 20 percent annually. Caruso approaches the task of identifying and luring tenants to its properties in ways similar to how retailers might determine what products to stock on their shelves, a process known as merchandising. Retailers merchandise by first deciding what types of consumers they want to attract and then selecting merchandise that suits that vision. Caruso seeks out its retail tenants in much the same way. “It’s a case of understanding the market you reside in and what makes you different from the rest,” said Russell. “With that philosophy, you go down the path to make yourselves different through merchandising and architecture, but you have to have the understanding of the tenant you are courting.” The process isn’t foolproof, as was evidenced by the first group of tenants at The Grove. “In the past couple of years we’ve spent significant time refining the tenant mix,” Russell said of The Grove. “It’s taken us time to recapture spaces that didn’t fit or were underperforming.” Re-merchandising properties Since January, Caruso has added five new tenants including Michael Kors’ first Los Angeles lifestyle store, Barney’s New York CO-OP, and Kiehl’s at the Grove, and Russell noted that the company’s assessment is ongoing. “We are continually re-merchandising these properties,” he said. “It’s the only way to keep them new and vibrant.” As it began the job of finding tenants for the 475,000-square-foot retail portion of Americana at Brand, Caruso had an unexpected advantage. The demographics of Glendale coupled with its proximity to neighborhoods like Los Feliz, Pasadena and Burbank, were a big attraction to the retailers who have so far signed on to locate at the property. “We looked at the demographics of the Glendale area and The Grove area and they were somewhat strikingly similar,” said Michael Celestino, executive vice president of stores for Barney’s. “And the combination of what Caruso had been able to accomplish and our knowledge of the Glendale area and the customer base led us to pursue that opportunity.” Like its flagship stores, Barney’s CO-OP is a high end retailer with an emphasis on the newest, most fashion-forward designers. Within months of locating at The Grove earlier this year, the store there became the 14-store chain’s best performer, even outpacing its New York unit. Free People, a division of Urban Outfitters that attracts young, twentysomething women and is just beginning to build its freestanding store chain with 10 boutiques so far, was also attracted to the demographics of the Glendale area, but like many of the retailers who signed on at Americana, the fact that Caruso has been able to amass a following of like-minded retailers with its other shopping centers has instilled confidence that retailers will find themselves among the same upscale collection of stores in Glendale as well. “We were drawn to the overall center, to who their target customer is, and to the demographics of the other stores that are going to be in there and the location,” said Free People spokeswoman Katie Britt.

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