An Interview on Commercial Real Estate in the South Bay

Today’s post will be the first of many interviews or chats with experts in real estate or local residents that I am planning. Matt Adamcyzk is a Senior Associate with Sachse Real Estate Company, Inc. and is an 18 year resident of the South Bay. His area of expertise is in Shopping Centers/Retail and has been so for the 18 years that he has lived here.

TC: Matt, thanks for taking the time out of your busy schedule to speak with us about commercial real estate. What are the market conditions at this time for shopping centers and retail?

MA: Your welcome and thanks for the opportunity to chat. As for the market at this time, conditions overall are very challenged to say the least. As long as unemployment keeps rising and consumer confidence keeps falling, I think the market conditions will continue to be challenged for at least another year or two.

Tony: I recently read that there are a record number of retail vacancies on PCH in Hermosa Beach and Redondo Beach. Is this an artifact of the overall economic conditions of our area?

Matt: Absolutely. An additional challenge might be that PCH is really more of a traffic corridor and not an artirial corridor or business hub like you might see on Hawthorne Blvd.

Tony: With all of these vacancies, I would assume that rents will drop? Is this fair to say?

Matt: I think so. The rents commanded in many selected areas of Southern California have been adjusting these past couple of years.

Tony: Very interesting. I’ll bet someone must be benefitting from this.

Matt: Credit-worthy companies with the cash are definitely able to expand in this climate. Examples would include the drug super stores like CVS, Rite-Aid, and Walgreens that are popping up on PCH in the South Bay and are clearly thinking in the long term. Another example are banks and credit unions. I have a new credit union client that is hoping to add five units over the next year or so.

Tony: Any genral recommendations for folks hoping to open up retail locations?

Matt: When you think of shopping centers as an asset class, the best locations tend to be in those areas that are anchored with grocery store chains. Traffic to these stores is usually not negatively affected by economic downturns.

Tony: Thanks again Matt.

Matt: My pleasure Tony.