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On a recent trip to Southern California, Shopping Center Business noticed that the Inland Empire seemed like it had a lot of activity. For more read the complete article. Visit our website https://www.progressiverep.com/.

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inland empire

INLAND EMPIRE

As seen in...

Rediscovering The Inland Empire

California’s Inland Empire has quietly had a renaissance over the past few years.

Interview by Randall Shearin

Metro & Main in Corona, California, is one of the first mixed-use projects planned for the Inland Empire that will feature apartments over retail.

UMANSKY: The biggest misconception

n a recent trip to Southern Cali-

fornia, Shopping Center Busi-

ness noticed that the Inland Em-

Recession.

The market has made a quiet come-

is that SoCal’s Inland Empire, which in-

O

back. New transportation arteries have

cludes both San Bernardino and River-

pire seemed like it had a lot of activity. The

opened in the area, and new restaurants

side counties, is a stepchild to Orange

area’s regional centers are active, and its

and retail have discovered the market to

County, Los Angeles County and San Di-

strip centers appeared healthy. The Inland

create more destinations and amenities

for residents as well. SCB recently in-

ego County. While there are many who

Empire grew with the burgeoning econ-

live in the Inland Empire who commute

omy in Southern California in the late

terviewed Brad Umansky, president of

to those markets, there is an even larger

1990s and early 2000s. The area was rife

Rancho Cucamonga, California-based

number of people who live, work and play

with new homebuilding and many new re-

Progressive Real Estate Partners, to get a

in the Inland Empire. A downside to the

tail projects in the mid-2000s. Like many

feel for the market’s status today.

recent economic growth that has taken

suburban markets with incredible growth

place throughout Southern California

SCB: What are some of the misconcep-

rates, the Inland Empire — defined loosely

is increased traffic and congestion. As a

as Riverside and San Bernardino Counties

tions that people may have of the Inland

result, just driving out of the market on

and some parts of Eastern Los Angeles

Empire?

the weekends has become challenging,

County — was hit hard during the Great

so many people choose to stay closer to

May 2017 • SHOPPING CENTER BUSINESS

inland empire 1

INLAND EMPIRE

home. Luckily, they don’t have to drive far

because the Inland Empire has great retail

centers, plenty of entertainment options

and wonderful cultural opportunities.

Another misconception is that retail is

overbuilt in the market. We have really

balanced out the excess that we had after

the Great Recession when growth of retail

space got ahead of residential. As a result

of the residential market stalling there was

virtually no retail development during the

past seven years. Although we are current-

ly only building about 20 percent of the

houses we built in the mid-2000s, residen-

tial development is ticking up. We should

Sprouts, one of the grocers actively expanding in the Inland Empire, is opening at Alta Loma

Plaza in Rancho Cucamonga, California, this month.

see a direct correlation in the future be-

tween new retail development and new

residential building.

of the first mixed-use projects in the trade

reasons that a Food Hall can work in a

SCB: What are some of the hot spots for

area that will have apartments over retail.

market like this is that people who live

retail in the Inland Empire?

Being a part of that type of a project has

here enjoy a range of ethnic foods. The

been interesting. We’ve confronted quite

Inland Empire is a giant melting pot. If

UMANSKY: There are several. Victoria

a few challenges creating a dynamic cen-

you look back 15 or 20 years, most people

Gardens in Rancho Cucamonga has

ter that plays off the apartments and the

in this area probably didn’t know what su-

turned out to be a gem of the market-

Metrolink train station across the street.

shi was. Now, we have sushi, poke, Thai,

place. A lot of people travel from long

We have also seen a substantial increase

and every other ethnic food.

distances to visit the center. It has a num-

in the amount of ground up development

SCB: You do a lot of work in the High Des-

ber of restaurants and retailers that have

that we are representing. In addition to

created a great environment. The area

leasing, the office is also very active in in-

ert. The area is an extension of the Inland

around Ontario Mills is another popular

vestment sales and we currently have over

Empire that is a bit of a secret market. Tell

retail destination. The Citrus Village and

$100 million in ‘for sale’ retail properties

us about that market.

Mountain Gate centers in Redlands have

listed.

UMANSKY: Yes, the High Desert is part of

helped create a hub there as well. Down-

SCB: What are the demographics like, in

town Riverside has also really become a

the Inland Empire and primarily compris-

dynamic area and the Temecula/Murrie-

general, in the market?

es the cities of Victorville, Apple Valley,

ta markets are very vibrant as well. In the

Hesperia, Adelanto and Barstow. The

UMANSKY: The Inland Empire is home

High Desert, the Mall of Victor Valley

High Desert has a significant amount of

and surrounding retail is a favored shop-

to over 4.5 million people. About 50 per-

available land, and thus it ebbs and flows

ping area. Highway 111 that runs to Palm

cent of the residents consider themselves

with the econo-

Springs is going through a renaissance

of Hispanic heritage. But, many are sec-

my a little more

with a lot of redevelopment taking place

ond or third generation. Some retailers

than other trade

in the Coachella Valley.

equate a Hispanic population with lower

areas in South-

incomes but that is not always the case.

ern California.

SCB: You represent retailers and land-

The highest income communities — like

That said, there

lords. What are you currently working on

Rancho Cucamonga and Corona — have a

has not been a

in the market?

very high percentage of people who trace

lot of new con-

their roots to a Hispanic origin. We are

struction there

UMANSKY: Our firm specializes in the

also seeing significant growth in the Asian

of late. The

leasing and sale of retail properties in the

population, who have moved from the

area has really

Inland Empire. We currently handle the

San Gabriel Valley further east. That is cre-

strengthened

leasing for over 100 shopping centers in

ating some interesting opportunities. We

over the course

Brad Umansky

President

Progressive Real Estate

Partners

the region. In addition to the bread-and-

have seen the Food Halls start to develop.

of the past few

butter leasing activity, we are involved in

A prime example is Haven City Market in

years and it is

the re-tenanting of several big box spaces.

Rancho Cucamonga where a Food Hall

well positioned

We are representing an exciting project

will anchor a new indoor marketplace in

for future eco-

called Metro at Main in Corona. It is one

a former JC Penney location. One of the

nomic growth

SHOPPING CENTER BUSINESS • May 2017

inland empire 2

INLAND EMPIRE

including new residential and industrial

development. It is a place where housing

is affordable, the air is fresh and there are

a number of manufacturing jobs. People

seeking a good quality of life are relocat-

ing to the area.

SCB: What is lacking in the Inland Em-

pire? What opportunities do you see for

retailers?

UMANSKY: Our marketplace is similar to

many markets around the country. We

are gravitating toward more food uses

and unique grocery concepts. The first

Haven City Market is a unique new indoor marketplace anchored by a Food Hall and grocer

that is planned for a former 75,000-square-foot JC Penney location in Rancho Cucamonga,

California.

365 by Whole Foods in the market will

soon open in Upland. Sprouts and Smart

& Final have been very aggressive in

opening new stores. We are seeing a lot

UMANSKY: The vacancy rate is at about

of meals-to-go and in-store dining from

markets. So much site selection is done by

grocery retailers. The Hispanic grocers

parties who are not based in the market;

7.5 percent which is the lowest it has been

are also seeking opportunities, although

they may know the market, but they don’t

since 2007. The rate peaked at 9.8 percent

they are in a phase where there are few

know it as a resident does. We have seen

in 2011 and we have seen the greatest de-

locations available. These include Carde-

retailers who have opened in this market

crease since then over the past 12 months.

nas Markets, Vallarta Supermarkets and

who have exceeded their expectations.

That correlates to space absorption, of

Superior Grocers. Likely, they will have

They generally tend to be more surprised

course. Our top-of-market lease rates

to begin doing ground up development

at how well they do than the reverse.

are about $4 per square foot per month

if they want to expand. Another catego-

for high quality, new construction space.

SCB: How has the market physically

ry that is taking off is health related uses

That is about 30 percent above the top-of-

and fitness. There is a growing demand by

changed over the past 10 years?

market lease rate in the last cycle.

these types of users for retail space. The

UMANSKY: There has been tremendous

SCB: What should retailers who are in-

Inland Empire is a very family oriented

region; people are busy with their fami-

investment in the infrastructure over the

terested in the Inland Empire market be

lies and their jobs. Retail concepts that do

past five years. The Interstate 15/215 in-

aware of when entering?

well here provide the conveniences those

terchange that leads to the High Desert

UMANSKY: As we work with certain retail-

families need, as well as provide enter-

has been completed which is a tremen-

tainment. There is a great new entertain-

dous benefit to that market. The 91 Free-

ers, they find it interesting how spread out

ment retailer in the market called Big Al’s,

way expansion in Corona has just been

the market is geographically. It is challeng-

which recently opened in Ontario. It is a

completed as well as the Foothill Parkway

ing for them to understand why one area

cross between Dave & Buster’s and Lucky

in Corona. The 91 freeway now has six

is a strong, high income area, and just a

Strike. They have done an amazing job at

lanes, plus two carpool lanes, going in

short distance away you are in a lower

hitting what this market loves. They chose

each direction. That is 16 lanes going

income area. They also find it difficult to

Ontario as their first market in California

through Corona. There have been a num-

figure out how far someone will drive to

which shows that they saw a demand for

ber of new interchanges built throughout

visit a project. Unfortunately, that means

quality entertainment here. This is a mar-

the market. All of this investment helps

that too many retailers gravitate toward

ket that thrives on indoor and outdoor

with the movement of people and goods.

common locations — the herd effect. I be-

entertainment options.

We are also seeing the increased use of

lieve many good locations are overlooked

public transportation with Metro Link.

because of a lack of retailer knowledge. It

SCB: How healthy is the Inland Empire

That is a huge benefit to residents, espe-

is difficult to convince them to try unprov-

market today?

cially those traveling regularly to Orange

County or Los Angeles County. SCB

en locations, even though we know from

living and working here these are great

This article originally appeared in Shopping Center Business, May 2017.

© 2017 France Media, Inc.

www.shoppingcenterbusiness.com

May 2017 • SHOPPING CENTER BUSINESS