SoCal Retail Competition Remains Fierce

It is possible that some investors haven’t gotten the memo about trouble in the retail market—or maybe they just don’t believe the gossip. Despite all the talk, the Southern California retail market is still seeing strong competition, even in outlying markets, like Oxnard. Investec Real Estate Companies is particularly bullish on the Southern California and coastal retail market. The firm recently acquired the 356,864-square-foot The Esplanade Shopping Center in Oxnard, and said that competition for the asset—as is often the case in Southern California—was tight.

“We find the Oxnard retail submarket and The Esplanade Shopping Center so attractive because of the great demographics in Oxnard and the surrounding Ventura County, the fantastic tenant mix and the proximity to our other properties,” Kenneth Slaught, president of Investec, tells GlobeSt.com. “The Esplanade Center in Oxnard fits right into our sweet spot geographically. This property is located just across the river from Ventura and a mere 6 miles from Camarillo, plus it has the benefit of being strategically located along the 101 Freeway. With over 168,000 cars passing daily, it has the visibility and ability to draw from the entire county, which allows us to think not only about the Oxnard retail market, but all of Ventura County.”

The property was a gem for retail investors striking in today’s market. It hit all of the needs: strong tenant mix, with Dick’s Sporting Goods, Walmart Neighborhood Market, Bob’s Discount Furniture, Nordstrom Rack, TJ Maxx, Cost Plus World Market, Party City and Staples serving as anchor tenants, and a A-location. “The first two things we look at when evaluating a center are location and tenant mix,” explains Slaught. “With the location being right in our backyard, we knew the trade area, demographics and draw that this property has.”

Investec is an active investors in the market. It currently owns 300,000 square feet in Arroyo Grande, approximately 380,000 square feet in Santa Barbara and 560,000 square feet in Camarillo. “This puts Oxnard right in the heart of our portfolio. When evaluating the tenant mix, it has everything we are looking for. It’s anchored by Home Depot and Walmart Neighborhood Market, which fit our daily needs and two uses that we don’t see Amazon affecting that greatly,” adds Slaught. “Additionally, the majority of tenants offer products or goods that are seen as discount items, which have shown to thrive even in the age when so many sales are going online.”

Of course, Investec isn’t the only Southern California retail investor looking for these qualities, and competition on the Esplanade deal was strong. “Competition in this market is very tight, especially when it comes to a quality asset like The Esplanade Shopping Center,” says Slaught. “The Esplanade anchor tenants are split between grocery/daily needs and “best in class” soft goods, home improvement, and specialty tenants. These groups have proven to be the top operators in their respective categories and the strong sales they report, validate the strength of the location and surrounding trade area. Throughout coastal California, centers like The Esplanade have always been competitive for the amount of traffic they drive on a daily basis and the security that comes with the strong tenant mix. In terms of capital sources, if you are able to secure a property like The Esplanade, then capital sources are abundant. Both private capital and lenders realize the security that these types of centers offer.”