GPS Retail Newsletter

Second Quarter 2016

Santa Barbara County

• American Airlines Begins Nonstop Service Between Santa Barbara and Dallas. An expected increase in tourism is expected to result from this.
• As of June 17, Supercuts is open at 3609 State St. in Ontare Plaza on Upper State St.
• Dunkin’ Donuts Opened on 3771 State St. Tuesday, June 7th.
Zizzo’s Coffee moved into Hollister village in Goleta June 2nd.
•A new breakfast restaurant “Breakfast,” opened on Chapala St. The idea is to use Breakfast as a platform for showcasing and connecting artists both near and far.
• Pacific Gas and Electric Co. announced plans to close Diablo Canyon power plant. This will affect the price retailers pay for power. The closure of the nuclear plant will result in an approximately $920 million annual loss to the economies of San Luis Obispo County and northern Santa Barbara County.
Industrial Way in Buellton is transitioning from industry to a tourist mecca for food and beverages
• Major new shopping center in Santa Maria moves forward. The two highlight companies moving to the center are Costco and Lowes.

Ventura County

• ROIC California purchased North Ranch Shopping Center, a 146,625-square-foot neighborhood shopping center in the Los Angeles submarket of Westlake Village, for $122.8 million.
Aldi, the German discount grocery store will open its first location in Ventura County at 425 Cochran St, Simi Valley, CA 93065.
Galletto Bar & Grill in Westlake village closed in mid-June. This space will reopen as Finney’s Craft House & Kitchen
• There are plans to change the former Fresh & Easy Grocery Store into a drive-thru Starbucks at 5101 Telegraph Rd.
• Specialty home decor retailer Kirkland’s Inc opened a location in Oxnard at 301 W. Esplanade Dr. June 25th
Juice It Up! a leading raw juice bar opened a location in Thousand Oaks at 1404 N. Moorpark Road.
•Ventura County’s economy is showing mixed signals for future growth. Unemployment rate is falling but is partially attributed to the falling workforce.

San Luis Obispo County

• Shops, restaurants near Chinatown project experience drop in business. Before construction began, sales were up 30 percent and rising, but since the parking lot closed and the project went full swing they have dropped 22 percent.
 Chipotle Mexican Grill and Five Guys Burgers and Fries will be moving into a shopping center at East Grand Avenue and South Elm Street. They plan to open by 2017.
• New developments in downtown San Luis Obispo revealed that Williams-Sonoma is one of the retail spaces going in the Chinatown project.
Hapy, a new wine bistro opened in Pismo Beach.
• Clothing retailer H&M is planning to open its first San Luis Obispo County location this fall as part of the Chinatown project
• San Luis Obispo women’s clothing store and consignment boutique Finders Keepers has recently expanded its business to include online retail sales.
• A Mexican restaurant and a coffee shop are planned to open by early next year in the Laurel Lane shopping center.

Retail News

Staples is partnering with Office Network Bar to open 3000 sq ft of office space in stores for small businesses, startups, and individual professionals
Lululemon opened its first lab store in NYC. It’s a tailored, more versatile version of the store. This is evidence of international retailers looking to the U.S. for growth
• In an effort to increase sustainability, Starbucks is donating leftover premade food to local food bank. They expect to donate 5 million meals by the end of this year.
• Retail real estate owners have been terminating leases in an effort to coordinate renovations, lower risk, and bring in more profitable tenants.
Chipotle has filed for a trademark on the term “Better Burger,” signaling a potential for them to open a new chain of restaurants.
• Single tenant cap rates for the net lease retail sector hit a record low of 6.18% nationally in the first quarter.
• Roughly one-third of 715 small-business owners surveyed in June by The Wall Street Journal and Vistage Worldwide Inc. said that uncertainty related to the November presidential election is having a negative impact on their business.

Retail Trends

• Clothing shoppers prefer physical stores as opposed to online shopping. Consumers are looking for trendy, affordable clothes which they can try on in store
• One stop stores like Nordstroms are becoming increasingly popular
• There has been a significant increase in the sale of female plus sized clothing
• Retailers seeing surprisingly low sales in 2016.
• New marketing trend, location-based marketing, is starting to shape how companies interact with their shoppers. I.E. Starbucks’ mobile ordering and pay app and Uber connecting driver directly with customers.
• 2016 will be a big year for relocations and downsizing.
Online retailers are using temporary brick-and-mortar locations, pop-ups, to access a wider audience.
• Developers and Owners are seeing growing pressure to reinvent their spaces to keep up with the retail landscape today.
Dollar stores have been thriving through this retail slump. Dollar Tree, with about 14,000 locations in the U.S. and Canada, increased its earnings by 25 percent in the first quarter.

Investment and Development News

• The $375 million T-Mobile Arena, located behind the New York New York Hotel & Casino in Las Vegas, completed construction this quarter. The arena seats 20 thousand and will have a $100 million shopping and dining district.
The Wynn is spending $70 million on an additional 75,500 sq ft of retail space. It is expected to generate $25 million in earnings annually.
Related Cos. and Oxford Properties group are developing a $20 billion real estate project on New Yorks West Side. It will be 17 million sq ft across 28 acres.
Lemonade, an LA based  vegetable-focused restaurant, is adding 12 locations to its existing 23. The bulk of this expansion is expected to take place in the Bay Area
• 30% of all retail renovations since 1999 have been done in California, Texas, and Florida. LA has been the leading city with 650 renovations, twice as many as Houston, the city with the second most.