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Home Depot Commits $90M for Two New Stores

SAN DIEGO-The home improvement retailer signs on for two new build-to-suit stores at Kmart locations. The company will take over 236,000 sf at the Kmart sites.

By Amanda Paxson | Updated on November 16, 2005

SAN DIEGO-Home improvement retailer Home Depot has committed $90 million to occupy two former Kmart sites on 30-year ground leases that will result in two new build-to-suit stores, in El Cajon and Chula Vista. Atlanta-based Home Depot will relocate its El Cajon store to one of the sites, an 116,000-sf parcel at 350 Fletcher Parkway that is five blocks west of an existing Home Depot store. Mike Moser of CB Richard Ellis, who represented land owner San Diego Mart Associates in both deals, tells Globest.com that one reason for one of the deals is that parking is a problem at Home Depot’s current El Cajon site. The store is a very strong performer, however, so the move to the new location will help the retailer to maintain its market position, he says.The second site is a 120,000-sf Kmart store at 1030 Third Ave. in Chula Vista that will be designed to serve the central part of the city. The Chula Vista and El Cajon Kmart stores will both be demolished in the beginning of 2006 and rebuilt for Home Depot, with completion for both projects expected in mid-2007.Moser tells Globest.com that Home Depot will be building anew because its stores must be designed to bear the weight of the heavy materials that the chain carries. “They have a prototypical store layout and size, so it is in many cases as expensive to retrofit a building as it is to build a new store,” Moser explains.Mike Morris of Morris & Campbell represented Home Depot, which is the latest of many retailers and other tenants nationwide that have taken over former Kmart sites since that company began a string of approximately 300 store closings in 2002. Moser notes that other Kmart San Diego locations have been converted to Sears Essentials stores in the wake of the Kmart’s 2004 merger with Sears.

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