Q2: Occupancy levels tick down for 9th time in 11 quarters - John ...
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Q2 2021
Bay Area
Regional Shopping Center
Quarterly Report
Q2: Occupancy levels tick down for 9th time in 11 quarters
John Cumbelich & Associates Q2 2021 report on the inventory of flagship Power Centers revealed another minor drop in overall About the Report
occupancy in the Bay Area’s premier retail center asset class. For the ninth time in the past eleven quarters, vacancy has slightly The attached survey of
expanded in Northern California. Cumulatively, the occupancy rate has moved lower from 95.89% in Q3 of 2018 to 92.22% in Q2 flagship assets studies 25
of 2021. dominant Power Centers
located in each of the San
With a 2% occupancy rate drop in Q2, the East Bay has established itself as the most challenged Bay Area submarket, moving
Francisco Bay Area’s nine
from 92.33% to 90.32% occupancy in the past 90 days. Presently the East Bay has an inventory of 501,272 SF of vacant space,
counties. The survey cov-
which sum represents 49% of the entire Bay Area total. This sum represents an all-time high in East Bay vacancy levels.
ers 13.1 million square feet
The most significant and stubborn factor in premier retail center leasing is a growing pool of larger blocks to space that have failed of best in class inventory.
secure replacement tenants during the emerging recovery in retail that has played out during 2021. Presently half a dozen spaces The information in this report
between 31,000 and 48,000 SF remain vacant, with half of these being located in the East Bay submarket. That block of larger is for information
vacancies illustrates a marketplace with a shrinking pool of expanding users that seek blocks of 30,000 to 50,000 SF. purposes only.
(Continued on next page)
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Bay Area Regional Shopping Center / Quarterly Report Q2 2021
Summary
GO CONSIDER STOP
C AR S AR E T HE NE W CU S T OMER S
Drive thrus, car wash, and QSR brands aggressively seek to add units and
build scale.
NON-R E TAIL FILLING R E TAIL
Alternate uses such as self-storage and medical/urgent care continue to
emerge as solutions to retail leasing challenges.
BIG B OXE S, BIG P R OBLEM
A glut of big box spaces that lacks a pool of replacement tenant remains as
the major hurdle in retail leasing.
Conversely, QSR brands, fuel, C-store, car wash and drive thru concepts remain aggressive in their search to add units. Notable brands such as Raising Cane’s,
Dutch Bros Coffee, Chick-fil-A, BP, Circle K and Quick Quack car wash have worked aggressively to add units, taking advantage of shifting consumer habits around
drive thrus, mobile order pick up, and more time in the car as air travel remains below historic levels.
With uncertainty around the upcoming winter flu season, new rounds of COVID restrictions on retail and dining businesses, schools and workplaces, retail absorption
will be unlikely to post significant leasing gains during the remainder of 2021.
www.cumbelich.com
Bay Area Regional Shopping Center / Quarterly Report Q2 2021
Flagship assets included in the survey
North Bay
Inventory SF: 2,673,612
Available SF: 103,445
Occupancy Rate: 96.13%
East Bay
Inventory SF: 5,178,956
Available SF: 501,272
Occupancy Rate: 90.32%
San Francisco/
Peninsula
Inventory SF: 3,561,286
Available SF: 270,354
Occupancy Rate: 92.41%
South Bay
Inventory SF: 1,665,391
Available SF: 142,222
Occupancy Rate: 91.46%
www.cumbelich.com
Bay Area Regional Shopping Center / Quarterly Report Q2 2021
Results – Flagship Power Centers
North Bay Overall Occupancy
Inventory SF: 2,673,612
2018 2019 2020 2021
Available SF: 103,554 100%
Occupancy Rate: 96.13%
75%
50%
93.55%
93.29%
95.89%
95.68%
95.94%
95.59%
95.21%
94.77%
94.77%
92.54%
92.70%
92.60%
92.22%
97.16%
25%
San Francisco/Peninsula 0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Inventory SF: 3,561,286
Available SF: 270,354
Highest Occupancy
Occupancy Rate: 92.41%
Power Center SF Occupancy %
East Bay Bridge Center 453,500 99.31%
South Napa Marketplace 349,530 99.00%
South Bay Vintage Oaks of Novato
Union Landing
620,228
770,000
98.78%
98.21%
Ravenswood 101 1,517,692 96.84%
East Washington Place 341,441 96.50%
Inventory SF: 1,665,391
Nut Tree Village 392,000 95.72%
Available SF: 142,222
Occupancy Rate: 91.46%
Highest Vacancy
East Bay Power Center
Alameda South Shore Center 599,769
SF SF Avail. Vacancy %
124,522 20.76%
280 Metro Center 227,829 45,566 20.00%
Hacienda Crossings 470,000 73,123 15.56%
Inventory SF: 5,178,956
Downtown Pleasant Hill 345,687 52,954 15.32%
Available SF: 501,272
Occupancy Rate: 90.32%
Largest Vacant Spaces
BAY AREA TOTALS
Power Center SF SF Available
Ravenswood 101 1,517,692 47,973
Century Plaza 530,000 46,000
Downtown Pleasant Hill 345,687 40,000
INVENTORY: 13,079,245 SF Bridgepointe Shopping Center 572,000 35,550
AVAILABLE: 1,017,293 SF Pacific Commons 1,133,000 35,095
Santa Rosa Marketplace 541,693 31,635
OCCUPANCY RATE: 92.22%
www.cumbelich.com
Bay Area Regional Shopping Center / Quarterly Report Q2 2021
Featured Transaction
THE FIRM
John Cumbelich & Associates is a
San Francisco Bay Area firm that
Bank of the West provides commercial real estate
consummated a services to Fortune 500 retailers and
3,206 SF, 10 year lease at
select owners and developers of
2600 EL CAMINO REAL retail commercial properties.
PALO ALTO, CA The firm’s expertise is in developing
store networks for retailers seeking to penetrate
Contact
the Northern California
Joe Kuvetakis
marketplace, and the
representation of premier power
center and lifestyle developments.
Featured Listing
John Cumbelich
Chief Executive Officer
FOR SALE
john@cumbelich.com
300 FLORESTA BLVD CA DRE ID 01006249
San Leandro, CA
Long-term lease with a corporate
Tim Seiler
guarantee by Lowe’s – Credit tenant
Partner
Ideal 1031 investment with minimal
management
tim@cumbelich.com
CA DRE ID 01076263
Contact
Tim Seiler | John Cumbelich
Joe Kuvetakis
Associate Broker
VIEW DETAILS joe@cumbelich.com
CA DRE ID 01854159
Featured Retailer
PARTNER
North America’s Leading
Discount Variety Store
is Expanding!
Requirements 1330 North Broadway Suite 200A
8,000 - 12,000 SF Walnut Creek, CA 94596
San Francisco Bay Area Telephone 925.935.5400
Contact
Tim Seiler FIR M BR OCHUR E | V ISI T W EB SI T E
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Bay Area Regional Shopping Center / Quarterly Report Q2 2021
Notable Completed Transactions
Sprouts Farmers Market Lululemon Walgreens Albertsons Caliber Collision
48,137 SF 13,249 SF 17,506 SF 74,393 SF 19,400 SF
Lodi, CA Walnut Creek, CA Sedona, AZ P
El Paso, TX Fresno, CA
Burlington Smart & Final Stein Mart Advance Auto Parts BevMo!
42,216 SF 33,000 SF 30,000 SF 6,926 SF 4,662 SF
Pleasant Hill, CA Stockton, CA Walnut Creek, CA Pueblo, CO Lafayette, CA
Sprouts Farmers Market Hobby Lobby Heritage Eats Philz Coffee Yoga Works
32,620 SF 57,000 SF 2,448 SF 2,162 SF 7,000 SF
Newark, CA Concord, CA Walnut Creek, CA Lafayette, CA Walnut Creek
America’s Best The Shade Store Dick’s Sporting Goods Z Gallerie Pottery Barn
3,151 SF 1,468 SF 35,000 SF 7,028 SF 16,760 SF
Pleasant Hill, CA Lafayette, CA Morgan Hill, CA Walnut Creek, CA Walnut Creek, CA
Lewis Retail Centers Burger Lounge Bluemercury Gott’s Roadside Walgreens
12.85 Acre Site 1,713 SF 2,965 SF 5,500 SF 15,000 SF
Hercules, CA Walnut Creek, CA Lafayette, CA Walnut Creek, CA San Jose, CA
Walmart Tiffany & Co. Target Regency Centers LOJA
50,331 SF 6,785 SF 10.8 Acres 34 Acres 350,000 SF
San Ramon, CA Walnut Creek, CA San Jose, CA Petaluma, CA Pleasant Hill, CA
www.cumbelich.com
Bay Area Regional Shopping Center / Quarterly Report Q2 2021
Essential Truths – John Cumbelich
Among the many radical and fundamental changes wrought in retail ucts, but to monetize the traffic it generates by leasing space to Quick
through the COVID crisis, perhaps none has been more widely accepted Service Restaurants and other retail and dining brands inside their box.
than the notion that what we now call Essential Services are the most
Brands like Subway, Arby’s and others are moving quickly inside of
indispensable and resilient of all retail offerings. The places where
these mega-sized C-stores, having learned to expand their site selec-
we purchase our food, fuel, medicine and home improvements have
tion choices beyond the traditional shopping center, to the interior of a
powerfully outshone all others throughout the recent pandemic.
highly trafficked box that sells fuel and groceries 24/7/365. Savvy brands
Now, having trained ourselves to look at retailing through the lens of always seek to position themselves where the customers can be
Essentiality, a remarkable trend has become apparent, as various counted on. And you can’t count on a more durable source of customer
retailing brands are increasingly seeking to put multiple essential traffic than the place that sells both groceries and fuel.
offerings under one roof. Perhaps you have noticed how your grocery
We are on the leading edge of a radical reinvention in retailing that will
store…has gotten into the fuel business. Or how the place where you
continue to morph and grow as the integration or marriage of various
buy fuel has been dramatically growing the size of its grocery offering,
essential service providers continues to play out.
quickly moving from 500 SF to 2,500 SF to 5,000+ SF.
Consistent traffic is the lingua franca of retailing. For decades, grocery
This poses an interesting question, and perhaps a peek into the future
stores have proven to be the critical catalyst that spawned thousands
of retailing. Why wouldn’t CVS or Lowes or Walgreens get into the fuel
of shopping centers, creating the daily-needs shopping patterns that
business too? If Costco can sell gas, why can’t Home Depot?
attracted the café, the bank, the shop and the restaurant. Looking
Among the most fascinating of the early adapters in this re-shaped world forward, brands that can offer essential goods and services will seek
of retail are Convenience Stores. Numerous brands such as EG Services both to consolidate and congregate, thus concentrating retail traffic
(Tom Thumb, Turkey Hill, Quik Stop, etc), Maverik, Rocket, Pilot Flying J much like the neighborhood grocery store did, and catalyzing a next
and others are now building C-stores of 5,000, 6,000 and 7,000 SF. And generation in retail development.
increasingly these brands are leveraging the repeatable traffic that both
fuel and grocery sales generate not simply to sell their essential prod-
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