By BARRY LANK
The storefronts of the Eastside have seen a great deal of churn this year. New, high-end cafes, boutiques and chain stores have opened while long-time players have closed or moved in search of cheaper rents. Landlords have gone in search of tenants to fill flashy new developments while once forgotten blocks have emerged as promising retail and restaurant destinations.
The Eastsider asked a trio of commercial real estate brokers to get their views on the market for storefront spaces.
Location, Location, Location
The most in-demand neighborhoods are Echo Park and Silver Lake, say the brokers. The two neighborhoods benefited in part from their location between booming Hollywood and Downtown, said Ted Hirsch with SouthPark Group.
“New projects along Sunset Boulevard in both areas are driving bigger brands/restaurant groups to the stretch of Sunset between Virgil/Hillhurst, all the way down to Dodger Stadium,” Hirsch said.
Those tenants searching for alternatives to Echo Park and Silver Lake are looking at places like Boyle Heights, Elysian Valley, Highland Park and Lincoln Heights, said Clint Lukens of Clint Lukens Realty.
“As Silver Lake and Echo Park continue to season with more restaurants and retail, tenants and investors continue to push east,” Lukens said. “Time will tell if their expectations are fulfilled.”
New shops, yoga studios and cafes have popped up in once overlooked stretches of Glendale Boulevard in Echo Park and former industrial and warehouse properties in Elysian Valley.
In Glassell Park, the opening of the “small-format” Target on Eagle Rock Boulevard and the construction of new residential projects with retail spaces up the street are attracting the attention of investors and potential tenants to the strip.
“Eagle Rock Boulevard is the street that has the most upside in my opinion,” said Judah Dorn, a Senior Associate with CBRE. Target may “not everybody’s first choice, but the area is underserved and it will do well. Target is a national tenant that really understands where this area is headed.”
Hillhurst Avenue in Los Feliz is a long established shopping and dining street. But the arrival of several new shops and cafes — including chains like Blue Bottle Coffee and a Starbucks Reserve — have made it more competitive with Vermont Avenue.
“I think Los Feliz has really surprised me a lot in terms of just the amount the changes I see on Hillhurst,” said Roger Merians with Atlas Real Estate Group. “It’s an interesting dynamic in the mix of the kind of people you see up and down the street.”
An appetite for restaurant tenants
The dramatic rise in online shopping has left many brick-and-mortar outlets struggling. In contrast, restaurants are seen as less vulnerable. In hot markets, like Silver Lake, restaurants are paying $5 a square foot and more, said brokers.
“Restaurants themselves may pay more because, while retailers are closing stores, restaurants and coffee shops are thought to be Internet-proof,” Dorn said. “Landlords often want good restaurants for mixed-use projects.”
The brokers have been surprised by the continued strength of the market.
“The last couple years have been over-the-top … in both lease rates and sale prices,” said Lukens. “I am worried rents have overshot in both commercial and apartments, yet demand continues.”
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