As printed in the San Diego Business Journal

SUCCESS IN RETAIL DEVELOPMENT
By Brian J. Quinn
First Vice President
FLOCKE & AVOYER Commercial Real Estate

The fast pace of the world we live in correlates directly with the evolution of retail development. Its effects are seen in tenants, new construction and the types of retail stores and restaurants that consumers frequent.

Creating a user-friendly and successful center cannot be accomplished without careful planning. Retail developers must work with numerous variables that ultimately will blend together to create the final experience -- a solid tenant base with solid consumer support.

As we begin 1999, the overall retail market in San Diego continues to be strong. This year should continue to be good for most retailers. Since the last recession, there has been a shake out in the industry, so more of today's retailers now know what they need to do to make money. Tenants now have more realistic expectations and are more careful in their approaches to the business, and are more cognizant of what consumers demand for their dollar.

A successful shopping center is one created to give consumers an experience. A good strong tenant base encourages cross-shopping for its consumers. Including anchor stores such as The Home Depot, Ralphs and Target provides a good foundation for a center, and by incorporating the tenant mix with food and service enterprises creates the broad base of opportunity for the consumer. To a lesser degree, often times, including a Blockbuster and a Starbucks also can provide a solid foundation for a convenience-oriented center.

Sometimes choosing stores for their credibility can bring a center higher traffic and sales. Simply adding a Starbucks to the mix can increase the consumer base. Tenants like Starbucks, though smaller in a square footage, have the ability to dramatically enhance sales of the shopping center. People enjoy "one-stop shopping," which makes a good tenant mix critical to a shopping center's success.

A good example of this is the new Mission Valley West shopping center, which includes Borders Books, Golfsmith, Marshalls, Old Navy and Gordon Biersch. There, a strong shopping experience was created and the property is thriving with repeat customers.

In San Diego, like most other cities in the nation, the retail industry is a survival of the fittest. Location is still paramount as tenants become more selective in their site criteria. As development of smaller retail projects has slowed, emphasis is now placed on facilities for larger, credit-worthy tenants whose merchandise is of broader appeal and who are capable of paying higher rent.

That is not to say that a smaller individual shop could not do well in the right location. If the business has a good local operator, offers a good -- and albeit different -- product or service, the smaller store has the ability to do fine. The mom and pop stores have to distinguish their products, style and services in order to survive.

In a time of intense competition, retail specialists need to draw from many broad elements to bring together successful retail properties. More than ever, planning and monitoring of the retail market is demanded if developers, and their retail tenants, are to respond successfully to quickly changing market conditions.

FLOCKE & AVOYER Commercial Real Estate is San Diego's largest-volume, locally based commercial real estate brokerage concentrating solely on the sale and leasing of retail properties. Since its establishment in 1985, FLOCKE & AVOYER has been involved in $1.4 billion in total lease and sales transactions. In addition to representing retail tenants and offering comprehensive shopping center development consultant services, FLOCKE & AVOYER is the exclusive marketing agent for more than 100 shopping centers (more than 9 million square feet of retail space) throughout San Diego County.