Hosted this past Tuesday, July 12th, at Santa Monica’s gorgeous beachside Hotel Casa Del Mar, ACRE SoCal presented their annual Los Angeles Spotlight. This year’s spotlight event concentrated on the Santa Monica market.
Santa Monica Focused Moderator + Panelists
The event was moderated by Michael Pakravan, a retail leasing specialist with Kennedy Wilson, and passionate advocate for the growing Santa Monica area CRE industry.
The event’s expert panelists included Bill Tucker, a seasoned retail developer and founder of Tucker Investment Group; Christine Deschaine, a retail leasing and investment sales VP with Kennedy Wilson; Lee Ann Rosenblum, a tenant representation specialist with Epsteen & Associates; Richard Ratner, an office leasing broker with CBRE; and Babak Ziai, real estate investment consultant with Brandview Capital Partners.
These highly regarded real estate professionals shared their recent experiences in different facets of the City of Santa Monica’s thriving real estate market.
The esteemed group offered insights on a range of topics, including: the Metro Expo Line’s impact in facilitating greater access to the area, local patrons’ propensity to seek healthy eating options and developers continued creativity in bridging the gap between local residents and property stakeholders through the approval process.
The Retail Development Perspective
Bill Tucker of Tucker Investment Group first shared his latest project on Third Street Promenade. His firm recently delivered Bruxie Gourmet Waffle Sandwiches, a unique and exciting food concept with seven locations, including Las Vegas, Orange County and Santa Monica.
Bill detailed the intricacies of introducing a newer concept into a highly competitive environment while managing the City of Santa Monica stringent approval process. Educating key decision-makers via site visits and more focused concept exposure enabled Bill to bring the project to fruition and add another outstanding amenity to Third Street Promenade.
The Retail Lease Perspective
Christine Deschaine of Kennedy Wilson related her current assignment on the new development at Colorado and 5th Street. Directly adjacent to the Santa Monica Expo Line, the project consists of a vertically mixed-use property including hospitality and retail units.
With approximately 4,600 square feet of retail available for lease, the project’s core benefits include easy access to public transit, general walkability, and the draw from restaurants that offer healthy fare and promote active lifestyles, which are very popular among local patrons. Prime examples of such eateries are Milo & Olive and Ingo’s Tasty Diner.
Christine suggested that landlords and developers take a further step in the pre-leasing process, and create renderings to help tenants envision the end product. Such visual aids also assist tenants in successfully navigating the city approval process.
She also emphasized that tenants have been working to maximize space and create more efficient layouts to better accommodate urban sites. An operational shift that opens further opportunities for a myriad of retailers.
Retail Tenant Representation Perspective
Lee Ann Rosenblum of Epsteen & Associates highlighted her assignments in Santa Monica with a focus on the delivery of Luna Grill Fresh Mediterranean.
Echoing Christine’s comments on fast, fresh fare, Lee Ann has seen these types of “anchor” restaurants act as catalysts for change. People will always need to eat, and persistently crave new experiences. As such, these tenants will continue to be retail drivers.
Operators like Luna Grill offer a hybrid of quick-dining combine with “linen cloth” service. Patrons order at the counter, but servers deliver food and bus tables. This sort of service has become a commonplace expectation in retail environments such as Santa Monica.
The Office Leasing Perspective
Richard Ratner of CBRE focuses on creative office space, representing landlords and tenants. Representing such interesting developments as Roberts Business Park and Lantana West, Richard described the influx of technology companies into the Silicon Beach.
The tenants are operating in different ways than traditional office users. Public transit and bicycle use are prominent features of these new look tenants.
In this arena, deals are getting done due to landlords’ willingness to securitize leases with large deposits, a measure that offsets the risk of allocating capital improvements and space build-outs.
The Real Estate Investment Advisor Perspective
Babak Ziai of Brandview Capital Advisors described his participation in purchasing the retail portion of The Waverly on Ocean Avenue, originally developed by Related Companies. Representing an urban-focused fund with JP Morgan, Babak was instrumental in providing the analysis and justification for the acquisition by illustrating the property’s positive attributes, including: experiential tenancy, internet resistant services and proximity to public transit.
The complexities of the deal included a 99-year lease with the City of Santa Monica, which created a sublease status for the retail and residential vertically-integrated mixed-use project.
Although the deal’s property type and size are not typically on the radar for Institutional capital, funds have begun identifying deals of this size, with these asset types as acquisition targets.
Additionally, Babak underscored the fact that well-funded local and regional tenants are now trading like national credit-worthy tenants.
Santa Monica’s Commercial Real Estate Future Looks Very Bright Indeed…
The City of Santa Monica is amid a burst of activity with new and exciting projects. By leveraging the Expo Line’s convenient public transit, finding fresh-fare focused food operators and maintaining service-oriented retail to provide high-level amenities for the growing tech and professional services companies, the future looks bright for these projects and the area.
Many Thanks to the Outstanding Panelists
ACRE would like to thank, and again acknowledge our panel, including Christine Deschaine of Kennedy Wilson, Richard Ratner of CBRE, Lee Ann Rosenblum of Epsteen & Associates, Bill Tucker of Tucker Investment Group and Babak Ziai of Brandview Capital Partners along with our moderator Michael Pakravan of Kennedy Wilson. Our gratitude also extends to the outstanding professionals in our audience.
Don’t Miss ACRE’s Annual Summer Party!
Please join us for our next event as we enjoy an afternoon of networking at the lovely Huntington Beach Hyatt for the annual ACRE Shaker on Thursday, August 11.
Real Tales 