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Q&A JLL’s Laura Tinetti: Where to find Bay Area’s Prime Urban Retail Corridors

National  + Weekender  | 

The retail landscape continues to adjust in response to shifts in consumer preferences. Dated malls are giving way to dynamic shopping districts that often feature unique experiences in an organic blend of high street retailers along with national and international tenants.

JLL’s just released “Bay Area City Retail Report” highlights the role these prime urban corridors play, and where they’re located across the region. Connect Media asked JLL’s Laura Tinetti to share insights about these existing districts, as well as where she’s seeing new corridors emerge. The region is home to five prime urban corridors that enjoy a place among the elite urban shopping destinations.

Q: What role do these retail corridors play in today’s overall retail landscape?

A: As retail continues to streamline, greater emphasis is placed on strong urban nodes. The 37 prime urban retail corridors JLL identified are the focus of this transition. We’ve seen that success breeds success in retail, and these top spots are cementing their position as crucial locations for incubating the next wave of retail and food and beverage concepts, while also attracting international and boutique retailers. Yet interestingly, JLL discovered four of the top 10 most affordable retail markets are also in the Bay Area.

Q: Where are the five retail corridors in the Bay Area and what distinguishes them?

Union Square, San Francisco

Historically, Union Square held court as the premier retail destination in San Francisco. Now, its exclusive home to high-end locally-owned boutiques has given way to national brands. The corridor, which has experienced rising prices and record-breaking tourist visits, currently enjoys peak pricing levels. That has created a competitive buying landscape and it has stretched the boundaries of Union Square, as investors now seek assets on its edges in an effort to transform them into retail and dining destinations.

The emergence of Apple’s West Coast flagship store onto the scene in 2016 shifted attention to the north side of Union Square. Additionally, some locally-owned retailers are eschewing the historically-high rents, in favor of closing down or are seeking spots nearby in lower-cost corridors such as Mid-Market. Another Union Square strategy has been to close stand-alone stores and shift merchandise into high-end department stores. There are also increasing vacancy rates in the square with several large format departures.

Pacific Heights’ Fillmore Corridor, San Francisco

Eight years ago, a revolution began in Pacific Heights’ Fillmore Corridor. While primarily dominated by exclusive residential neighborhoods, that affluence has attracted a host of boutique retail experiences. Young locals and visitors flock to the trendy neighborhood in search of the cool new boutique or restaurant. National retailers like IRO and Verve are coming to the corridor in 2017, joining predominately luxury-lite tenants like Alice & Olivia, Joie, and Scotch & Soda. Given the formula retail regulations in place, national and international retailers are challenged to establish a presence, so too does the predominantly ground floor availabilities in residential properties.

Hayes Valley Corridor, San Francisco

Hayes Valley is defined by a vibrant arts culture on its eastern edge, and has captured the perfect mix of upscale locals and visitors attending performances at nearby venues. Among the initial wave of national and international retailers to discover the corridor were well-known brands like Kit & Ace (since closed), WarbyParker and Marine Layer.  The highly competitive leasing environment has pushed retailers into nearby neighborhoods, which are experiencing increased foot traffic as a result of continued residential development.

Marina Corridor, San Francisco

This corridor has become known as one in which athleisure and fitness have found homes. The eclectic mix of tenants, typically in small footprints, has long ranged from neighborhood retail and restaurants, along with a handful of national chains. That’s morphed a bit to accommodate a demographic base that favors athleisure stores and boutique fitness studios, including lululemon, Sweaty Betty, Rapha and Soul Cycle.

University Avenue Corridor, Palo Alto

The current tech expansion – and increased office demand – is changing the retail landscape throughout Palo Alto, as locally-owned retail stores get pushed out in favor of non-chain boutiques that cater to the Millennial generation. The corridor has also seen a surprising number of home goods stores pop up including Restoration Hardware, West Elm, Rejuvenation and Flor. Increased office demand has helped push retail rents up to nearly double what they were four years ago. New developments favor mixed-use projects that appeal to those who seek “live, work, play” environments, though new development caps qualify Palo Alto as an extremely difficult market in which to build. That’s resulted in retail property cost-per-square-foot prices being among the highest in the Bay Area, with many sale transactions exceeding $1,500 per-square-foot.

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About Dennis Kaiser

Dennis Kaiser is Vice President of Content and Public Relations for Connect Commercial Real Estate. Dennis is a communications leader with more than 30 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect’s client content operations and is involved in a range of initiatives ranging from content strategy, message development, copywriting, media relations, social media and content marketing services. In his most recent corporate communications roles, he led a regional public relations effort across Southern California for CBRE, played a key marketing role on JLL’s national retail team, and was responsible for directing the global public relations effort at ValleyCrest, the nation’s largest commercial landscape services company. In addition to his vast commercial real estate experience, Dennis has worked on communications and launch strategies for a number of residential projects such as Disney’s Celebration in Florida, Ritter Ranch in Palmdale California (7,200 homes, 22,000 acres), WaterColor in Florida and PremierGarage in Phoenix. Dennis’s agency background included firms such as Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, BoyScouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and Thunderbirds Charities.

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