All of what you just said Safeway does, selling the properties while negotiating in both very favorable leases as well as retail-first designs, are skills that I see no evidence Kroger possesses. They make a big one time cash-out profit and wind up with a new store that surpasses the volume of the old. My understanding from numerous conversations with Real Estate brokers is that non-traditional configurations with rooftop or subterranean parking and mixed use are up to 40% less productive. Safeway does not have that problem which is unique.Bluelightspecial wrote: ↑November 7th, 2023, 7:25 pm I disagree that Safeway (Albertsons) has any inherent expertise in California with mixed use developments over Kroger. Other areas like D.C. are different and are for a different board. The only "secret sauce" they had is they owned the property that they redeveloped, and they added additional retail. Any residential component was sold to a third party.. They then sold the property signing very favorable leases and future lease options for their stores. They did this in many sites in CA and WA and even HI. Whole Foods didn't own their properties. They signed some expensive leases on terribly designed mixed use properties. The Tarzana & Encinitas stores should be textbook examples of poor design. The underground parking and store access were terrible
If you want great examples of their inept urban design see the disastrous Ralphs in Downtown San Diego and the Downtown LA Ralphs. They're just as poorly accessible as the Tarzana and Encinitas closed Whole Foods.
California is going to force this mixed use urbanization on everyone with their preposterous "shook the Magic 8 Ball" mandates of additional housing that lacks any rhyme or reason and that means that in all of these cities who have to "find space" or either risk being sued by the state or now lose control of their own developments through the infamous "builders remedy" laws. And all of these developments that "must" be built all wind up being the same luxury apartments and condos we keep talking about. Once again we can debate the economy and whatever else but the state is explicitly forcing this upon existing cities even if they're out of land to develop, instead of smartly putting a greater burden on areas with open land that can be developed which ironically will be more affordable for residents. The state doesn't want to build 25,000 homes in say Victorville that'll sell for $300K and are taxed on that when they can try to force 13,000 more into places like Huntington Beach where each will be worth $1.5M and thus bring in 5 times the tax revenue per unit. That's why they designed the "goals" to somehow penalize the most valuable areas while underutilizing the faster growing markets.
The easiest space to build these mandatory apartments and condos is these shopping centers, and once again I cannot make it clear enough that the best outcome is for say Albertsons to call a developer and say "hey, I hear Huntington Beach needs to build 13,000 more units even though the land is 100% built out, let's make a deal and design a new mixed use complex for our Beach Blvd store then partner with the city to get it done. We'd like the best corner which is here and a larger store and..." versus getting the call that a developer is going to force a replacement of the center through builders remedy, which in turn will also result in an effectively forced eminent domain thanks to the fact that the developers are now more powerful than the city, and that there won't be any room planned so they need to have their million dollar a week store closed by the end of next month... Or if they're allowed to stay they get the back corner, limited signage and street access, challenging or impossible logistics, and crappy parking plus a terrible lease. So they are left with only an awful decision or a horrible decision. With the current situation in the West, Kroger and Albertsons are going to have to stay ahead of the process and embrace it, or be run over by it. Seeing as how Ralphs has not even demonstrated they can hold onto existing productive leases (like the very busy store they lost to Amazon Fresh in Encino), I don't think they are engaged enough or capable of coming out of this better off than they are today.