By Barbra Murray, Contributing Editor
Marking its second California development project of the year, Regency Centers has commenced construction on South Bay Village, a 109,300-square-foot neighborhood shopping center in Torrance, 19 miles outside of downtown Los Angeles. The retail property developer will invest $30 million in the project.
Timing is everything and, according to Regency Centers, the timing is just right for their latest construction endeavor. “South Bay Village has extraordinary demographics, which provide the foundation for strong retail sales,” Mac Chandler, western region managing director for Regency Centers, told Commercial Property Executive. “Many of the retailers in this area enjoy the highest sales in the Los Angeles region. We and our tenants at South Bay Village believe that they, too, will prosper.”
With Moorefield Construction on hand to spearhead building activities, South Bay Village will sprout up on a site — once home to a Kmart store — that will be renovated and expanded to accommodate new tenants. Orchard Supply Hardware and HomeGoods will anchor the Architects Orange-designed property, occupying approximately 49,700 square feet and 25,100 square feet, respectively. Another anchor spot featuring 30,000 square feet will be available, as will a single outparcel.
As Chandler notes, the national retail market has yet to fully recover. However, the climate for retail is a lot sunnier in Los Angeles County, particularly in the South Bay area. Los Angeles County closed 2011 with a respectable overall vacancy rate of 6 percent, according to a report by commercial real estate services firm CBRE Group Inc. And in the South Bay submarket, the rate was an even more enviable 3.4 percent.
The location of South Bay Village will provide the development with an added boost. The property sits in an infill location surrounded by shoppers who are financially able to spend; there are 242,000 residents with an average annual household income of more than $90,000 within a three-mile radius of the shopping center. Regency saw the potential for the project years ago, when it financed a property loan featuring an option to buy.
The debut of South Bay Village’s first anchors will commence in September of this year.
Regency Centers is clearly in a construction state of mind. Earlier this month, the developer began building the 260,000-square-foot Southpark at Cinco Ranch neighborhood center in suburban Houston, and in in February, kicked off the development of the 378,000-square-foot East Washington Place community center in Petaluma, Calif., near San Francisco.