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Tuesday, Dec 6, 2022
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Large Retailer Pulls Out of Local Centers

When a major national retailer says they’re closing hundreds of low-performing stores across the country, and four of them are in relatively close proximity to each another, one might expect to hear a lot of buzz about it. But it seems to be business as usual for the four Valley shopping centers where Linens ‘n Things has declared they will be pulling up stakes under a bankruptcy reorganization plan. General Growth Properties, which owns the Fallbrook Center in Woodland Hills, seemed unfazed by the news. “We certainly never want to see a retailer close at any property,” said Kirsten Lee, vice president of leasing for GGP’s regional office in Glendale. But, she added, “We just put the wheels in motion to find an appropriate tenant to backfill the space.” It would be the only space available in the fully-leased center, Lee said. Over at Glendale Marketplace, a principal with Western Commercial Real Estate echoed Lee’s sentiment. “It’s well located and there’s a limited supply of space like that,” said WCRE’s Scott Burns, who represents the center, “so we’re confident that we’ll find a replacement tenant.” Although Glendale Marketplace lost another major tenant, CompUSA, last year, Burns said they are “very close” to signing a lease with a major retailer. Moorpark Marketplace owner David Blatt of DSB Properties, simply said that they had not been notified of when the store would be closing because it was up to the bankruptcy court. He declined to comment on future prospects but John Tchetchenian, leasing manager at the Janss Marketplace in Moorpark about five miles away, which hosts a Linens ‘n Things that will stay open, said that he didn’t anticipate that DSB would have any problem filling the space. The smallest center of the four, Riverside Woodman Plaza in Sherman Oaks, on the east side of the Fashion Square mall might have problems attracting a new national tenant given that their building has not been renovated in years and has challenging parking and access issues. But representatives from the ownership, a private trust, did not respond to a request for comment and the manager of the Riverside Linens ‘n Things said he had no information about a closing date yet. Optimism on the part of the leasing people at these shopping centers is warranted, according to John Weiss, first vice president of Marcus & Millichap in Encino. The San Fernando Valley economy is in much better shape than the nation in general. For example, a recently-released Colliers International report on the national state of retail reported that retail sales across the U.S. have been slowing, ” as reflected in March retail sales which were up just 3.8% year-to-date.” That number jumps significantly, to 5.3 percent, when sales of automobiles are removed from the retail revenues equation, according to the U.S. Census Bureau’s April numbers. Even after factoring in rising prices the consumer price index increased 0.6 percent in the quarter, and 3.9 percent over April of 2007 there is still retail sales growth. The Colliers report stated that in the Los Angeles area, the average retail vacancy rate in the first quarter was still just 3.9 percent compared with a national retail vacancy average of 6.5 percent. The area’s retail rents are also still among the highest in the country, averaging $28.41 per square foot, compared to $16.93 nationally. With nearly 2 million square feet of retail space under construction in the region, that vacancy rate could climb somewhat, but new centers do not seem to be struggling to find tenants. “The worst thing out there is uncertainty,” said Valley native Weiss, adding that the area’s diverse economic base is still generally healthy: “I don’t see a lot of homeless people (in the Valley). I don’t see a lot of distress foreclosures.”

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