By Gail Kalinoski, Contributing Editor
Marinita Development Co. has been building and managing neighborhood shopping centers in California and Nevada for decades, but it’s making its first dip into the retrofit pool with a vacant Kmart in Banning, Calif., and it probably won’t be the last time now that the company successfully preleased all the space to four major retailers before closing on the property.
The former store in the Sun Lakes Village Shopping Center is being turned into four separate retail spaces ranging in size from 10,500 square feet for Big 5 Sporting Goods to 43,859 square feet for Hobby Lobby. Marshalls is taking 23,000 square feet and Party City, 20,020 square feet.
The store, located in the Banning/Beaumont trade area halfway between Palm Springs, Calif., and Riverside, Calif., has been empty since Kmart closed last June. Marinita Development, based in Newport Beach, Calif., went into contract with the owner and recently closed on the acquisition. Because it is a private company, numbers on the acquisition and cost of the retrofit were not released.
Scott Fawcett, president and co-founder of Marinita Development, told CPE prospective tenants began reaching out to them before they even began marketing the property.
“Tenants came to us and said, ‘We want to be there.’ It’s very unusual before you close escrow to have the whole building preleased. If you get half of it preleased, you’re happy. This was a real pleasure,” he said.
Two of the retailers – Party City and Big 5 – had been in contact with the previous owner before he decided to sell the building, Fawcett said.
“We had the contact with Hobby Lobby. We were able to pick them up and Marshalls too,” he said.
This was the first time Marinita did not do a ground-up project, Fawcett noted. He said they decided to keep the existing structure rather than demolish it because Kmart had remodeled the store in 2007.
“It was another advantage for us,” Fawcett said. “They had put in a brand-new roof and air conditioning and it was still in very good condition.”
Still, Fawcett notes there were challenges dealing with an existing structure, particularly the depth of the building. He said normally they would build a retail store with a depth of 150 feet and the Kmart had a depth of 250 feet.
“It took a long time with the four tenants to get the right configuration, but it all worked out,” he said.
Construction work began about a week ago. He said Marinita needs to finish its part of the redevelopment in time for the retailers to begin their own tenant improvements and get their stores ready to open by the summer. For example, Fawcett said Party City needs its store open by August to begin preparing for Halloween sales.
Fawcett said city officials have been very cooperative with the company. The Kmart used to hire about 90 workers but the four new stores are expected to provide more than 150 jobs, he said. Located on Highland Springs Avenue just south of Interstate-10, the shopping center is anchored by an Albertsons grocery store and Rite Aid.