“As our population in general, becomes more health conscious, specialty grocers will continue to be more and more popular, especially health-food oriented grocers like Whole Foods, Trader Joe's and Sprouts Farmers Market,” Killman observes. “Those retailers all want more space, if a landlord has a 50,000-square-foot Albertsons that closes, and can go ahead and split it in half and do a specialty grocer and another retailer, it's a home run for them.”

Killman also sees opportunity in the closure of apparel chain Coldwater Creek's 360 locations that accounts for 2.2M square feet of real estate. With very little new retail space under construction, closures like this, will make way for expanding chains to enter those vacancies. On another note, the entire apparel world is changing for a more demanding consumer.

“When you talk about fast casual apparel, or microwave clothing as some like to call it, which is H&M, Forever 21, Charming Charlie, those retailers can go from design concept to on the shelf in an incredibly short period of time,” Killman remarks. “The more traditional clothing retailers of the world just can't react that quickly. They're buying in the fall to sell in the winter of the following year. The customer of today, for the most part wants it now. Traditional apparel retailers are going to have to evolve very quickly in order to remain relevant with more nimble competitors, or they're going to be outdated and fade way.”

Restaurants are another segment doing well in Southern California, as they are in other parts of the country. Five years ago about 33% of the deals that Killman saw were restaurant leases, and that number is pushing 50%. Restaurants don't compete with the Internet, and people want a reason to go out, he says. Additionally, there is a large market in his region for fast-casual chains serving healthier fare, such as Urban Plates, Tender Greens and Veggie Grill. Even the wave of new gourmet/specialty pizza players are approaching pizza from a new angle. Fresh Brothers Pizza-Salad-Wings' Fresh Vegetable pizza with a gluten free crust is heavenly, and their performance is telling them that pizza aficionados everywhere are ready for high quality pizza with farm fresh ingredients.

Killman is also seeing growth in theater chains, especially those that provide an experience that is more than just a movie and one that's more difficult to create at home. Some operators are upgrading their concession offerings, replacing typical theatre seats with leather electric recliners and they're adding bars and making a portion of the screens for an adult-only crowd. The theatre industry is healthy, and ticket sales in '14 are up year to date over '13.

“Both investors and occupiers of retail real estate have to be experiential, and highly differentiated, in order to stay relevant,” he says. “If you can't wow today's customer, they are going to take their business to somewhere and to someone who can. If the choice is just to get out of their chair and go to any ho-hum retail environment or to a ho-hum retailer, they'll buy it online if they can. That trend is going to continue. Rick Caruso and Apple have both figured this out, the rest of the retail world won't be very far behind, if they want to survive in this post-recession, demographically shifting world that we live in.”