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Inland Analysts Expect Few Long-Term Vacancies As Stores Close
Wednesday, October 22, 2008 2:58 PM


(Source: The Press-Enterprise)trackingBy Lou Hirsh, The Press-Enterprise, Riverside, Calif.

Oct. 22--Retail experts say Inland shopping-center operators may need several months to fill the holes being left by recently departed national retailers such as Mervyns, Linens 'n Things and Wickes Furniture.

Observers note that vacant stores in well-located centers should draw other national retailers looking to serve the still growing region. But by the time the stores are all liquidated, their leases or real estate purchased and new tenants renovate and move in, it could be another year before the spaces are again open for business.

That's if the overall economy improves, which remains a difficult prospect.

"The areas that had the biggest housing booms are generally the hardest hit with retail vacancies," said Drew Wetherholt, a retail analyst in the Ontario office of brokerage and research firm Marcus & Millichap. "That includes the Riverside-San Bernardino area."

"It looks like 2009 is going to be a challenging year for retailers," he said, adding the Inland retail vacancy rate is currently around 13 percent, higher than the national average of 10 percent.

Among other departures, the Inland area earlier this year saw the closings of seven locations of Wickes Furniture and eight locations of Linens 'n Things.

Last week, Mervyns announced it would liquidate its remaining 149 stores, including a dozen Inland locations.

Those moves don't include the empty slots at local retail plazas that have lost tenants to new competing centers.

For instance, TownGate Center, off Highway 60 in Moreno Valley, recently saw the defection of Circuit City and Staples, which moved to newer retail centers across the border in nearby Riverside. TownGate also has a Mervyns store that will soon be shut.

"It's been difficult because that area is somewhat over-retailed," said Dan Samulski, a senior vice president with Grubb & Ellis, which handles leasing at TownGate.

"But I'm not so much worried about the Mervyns because it's got good access and visibility from the freeway," he said. "I've had several people approach me recently and say, 'hey, if that space ever becomes available, I'm interested.'"

Like other observers, Samulski said TownGate should be able to fill its vacancies within a year as the economy improves, but that will also depend on moves at the national level to spur consumer spending.

George Whalin, president of Retail Management Consultants in San Marcos, said Mervyns likely already has other retailers lining up to take over leases and buildings at some of the more well-placed locations.




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