California Centers Magazine serves retailers, developers, shopping center owners, investment sales brokers and tenant representation firms throughout the state of California.
Issue link: https://californiacenters.epubxp.com/i/711240
August 2016 | California Centers Magazine 25 C C "As strip mall owners, it is critical that we bring in customers to the cen- ter without limiting their experience exclusively to retail purchases," he says. "Cutting-edge restaurants, fit- ness- and entertainment-oriented re- tailers pull customers in and promote cross-shopping. Examples include re- gional tenants with a strong cult-like following such as Philz Coffee, Asian Box, Urban Plates, Orange Theory Fitness, Soul Cycle, Bitter Root and Muse Paint Bar." Even categories within categories are diversifying to provide the most impactful experience to consumers with short attention spans and an eye for technology. While traditional gyms are still popular in strip cen- ters, particularly in converted big box spaces, there are many new workout iterations emerging from the health and fitness category. "The health and fitness category has continued to grow, driven by boutique fitness offerings such as Soul Cycle, Orange Theory, pi- lates, barre and oth- ers," says Grant M. Gary, president of brokerage services for The Woodmont Company. "Not only are these concepts bringing con- sumers into shopping centers on a more frequent basis, they are creating synergies with consumers' evolving apparel preferences, such as athlei- sure concepts." Orangetheory Fitness, known for its cardiovascular and strength train- ing interval workouts that utilize a variety of equipment and new heart- rate technology, is one of the newest offerings in full expansion mode. The fitness franchise is on track to open 700 studios by 2017. Not surprisingly, health-conscious and fitness-addict- ed California is one of its primary targets. The Fort Lauderdale, Florida-based company recently signed two new leases in the San Francisco Bay Area. Orangetheory leased 3,210 square feet of end-cap space in a freestand- ing, multi-tenant building located at 3517 Mt. Diablo Blvd. in East Bay's Lafayette. It sits directly across from Whole Foods Market and Safeway, and is easily accessible from High- way 24 — the area's major east/west traffic artery. The company also took down 4,600 square feet of space with- in a freetstanding, multi-tenant build- ing at the corner of South B Street and First Avenue in downtown San Ma- teo. This outpost is situated directly across from a Caltrain station. Katie Singer of Cushman & Wakefield's Retail Services group represented the Orangetheory franchise in both trans- actions. The company is also a tenant at the Terrace, a two-level, 39,634-square- foot strip center in the Thousand Oaks submarket of Newbury Park, which was acquired by a Los Angeles-based private investor partnership in June for $15.3 million. The fully occupied center includes complementary ten- ants like Hot Yoga 1000, Road Runner Sports running shoes and Bottle and Pint craft beer bottle shop and tap room. At a purchase price of $385 per square foot, the sale represented a 6.59 percent cap rate. CBRE's Nation- al Retail Investment Group — West (NRIG-West) team of Philip D. Voor- hees, Jimmy Slusher, Megan Wood, Matt Burson, Todd Goodman, John Read and Preston Fetrow represented the seller, a Los Angeles-based pri- vate investor, in this transaction. "The Terrace is the quintessential SoCal strip center investment prop- erty," Voorhees says. "We love strip centers. Its dynamic tenant lineup ca- ters to the needs of this affluent, pro- gressive trade area. High-performing regional tenants like Orangetheory Fitness and Road Runner Sports com- plement local favorites like Holdrens and Bottle and Pint." POKING ABOUT Wong believes the activity abound- ing throughout the health and life- style sector is representative of larg- er patterns within strip center tenant rosters. "The wants of the consumer continue to evolve as does the strip center," he says. "From Millen- nials to Baby Boom- ers, we continue to see strong demand for things that are quick and conve- nient, but also so- phisticated in qual- ity and specialty. In health and lifestyle, we see special- ized concepts like yoga, pilates and spinning, such as with YogaWorks, Fly Wheel and Soul Cycle. There are also specialty clothing stores like Lu- lulemon, for example, which coincide with these healthy lifestyle concepts." Then there is the food craze. Though they love their craft beer, ar- tisanal pizzas and organic, grass-fed burgers as much as the next guy, Cal- SoulCycle is another popular fitness tenant that has been expanding in the state. Howard Wong Director of Retail Leasing Passco Companies Grant Gary President of Brokerage Services The Woodmont Company