GlobeSt.com: Would you characterize the big-box trend as growing or shrinking in the San Diego market?

Kobzi: It's definitely a shrinking trend. We're not building the centers we used to build 10 years ago. The power centers of yesteryear are just not happening. In San Diego, everything we see is mixed-use and infill, and we don't have much room for power centers anymore. Those category killers for retailers like pet-supply companies and sporting-goods companies aren't being created anymore. Our numbers prove that. We're down a bit on the boxes; there are pending deals on them. Some of them will probably end up being something other than a retail box.

GlobeSt.com: What types of big-box retailers are entering or remaining in the market?

Kobzi: There are some active ones and new ones coming to town, mostly in the 7,000-square-foot to 10,000-square-foot range. That stock is climbing rapidly because they're growing so fast. Hobby Lobby did the deal in the old Dick's Sporting Goods in Oceanside. Big Lots is not the old big lots, but a new concept they're rolling out that's more of a Bed Bath & Beyond-type use. They're stepping up their game and took the old Ralphs in Oceanside. And there are aggressive grocers out there: Aldi and all those guys are still active on the grocery front. The Floor & Decors of the world are another big expanding box, as well as Home Goods. There are people to backfill the boxes.

GlobeSt.com: What types are leaving the market?

Kobzi: Toys R Us is the biggest one right now. That's going to be the biggest impact this year unless someone else announces store closings. Everyone's waiting on Sears as well, what happens and when it happens. It's not a fait accompli, but one day we will wake up and hear about Sears. There are also the M&As, with Albertsons and Rite Aid merging—what's going to be the fallout there with that merger is yet to be determined.

GlobeSt.com: How is San Diego's big-box market different now than it was 10 years ago?

Kobzi: As I mentioned, we're not building that type of product anymore. Tenants are taking smaller spaces, so if you had a box—like in the case of the former Sports Authority in Escondido—it ends up going to two tenants: a Home Goods and an Aldi. That's probably the biggest difference versus 10 years ago.

To succeed, it takes a blend of e-commerce with brick-and-mortar space. You have to have a combined approach, and you can't turn that overnight. If you didn't implement that strategy several years ago, you're feeling the consequences now. If you try to introduce a blended strategy now, that should have been in the works long ago.

The only ones that can get away with not doing that are the discounters: the Dollar Trees and the off-price fashion tenants. If you look, tenants like TJ Maxx and Home Goods, they don't do much advertising and they do very little Internet business. The product changes on the floor so often that consumers have to go to the store; that's their draw. It's what bargain they can get that day.