Albertsons closing Irvine, CA

[ClownLoach]

Well over a year later...

- Bass Pro Shops will be opening its second SoCal location (and first in the LA-area) in the former Walmart.

- Both Albertsons' remained shuttered, with H-Mart listed as coming soon. Construction on the Alton location hadn't begun as of late fall, but it appears there's some activity taking place now. Elsewhere it was suggested that H-Mart may not be proceeding with the project, and the building is being used for storage (not sure by whom), so who knows? Allegedly, Aldi was interested in the former Rite Aid space in the same plaza, and Irvine Company said no, so I assume they will have another grocer soon...

Albertsons has historically been very good at putting anti-competitor lease restrictions in place - but Alton was a Lucky before so probably never had that language. But Sprouts is in the same center on Alton and they probably did put some language in that no additional grocery can open there besides the existing Albertsons space. Sprouts plus H-Mart plus Aldi next door to each other isn't going to work. So Sprouts is probably the real reason for Aldi being declined, if they really were. And Sprouts might want that Rite Aid too because their current box is really off the beaten path and they are moving forward with their new downsized store initiative under the former 99 cents store CEO.

(Off topic but I wonder if those lease restrictions hurt more than they help - two Targets still don't have P-fresh in Murrieta and Aliso Viejo because of the lease restrictions - I'll bet the Albertsons and now Stater Bros there would do better if Target did carry food because people avoid these locations and drive past them for a full line store)

The original Irvine H-Mart at Alton and Jamboree has a terrible parking configuration that severely impedes their sales ("Diamond Jamboree" - ain't a diamond at all) and I would imagine that they would close that store to move to the larger former Albertsons a few blocks down - really don't see them running both stores. I wonder if the delay is waiting for the lease to be up on the old store so it can close and relocate? No way they make a profit on these two next to each other especially when the Irvine Company location probably is top rent.

The other location, a former Albertsons on Irvine Blvd. is rather infamous for a violent incident that took place years ago. This location didn't seem to do much business as an Albertsons. For reasons I can't comprehend other than a likely rent discount they reopened a divested Haggen as a Pavilions a few blocks north that was even deader than this Albertsons. Only thing I could think of is that Albertsons wanted a smaller square footage and that's why they reopened the Haggen divestiture when it became available again, enabling the closure of the Albertsons that went to H-Mart while leaving them with a near monopoly on that market. If H-Mart can't get out of that original Jamboree location then once again there is little chance they can profitably operate both of these stores either as they're too close.

Basically I think H-Mart is stuck because they signed up for two new stores that are practically on top of each other with a 3rd existing store in the middle and their plan hinges on getting rid of that existing store. I suspect that if they can't get rid of it they will proceed on Alton but they will try to find another operator to take the Irvine Blvd. one. Zion operates a very smelly, dumpy old former Vons about a mile down the Blvd. and that is probably who H-Mart wanted to complete with. Ralphs bookends this site East and West on Irvine Blvd. with two very busy Fresh Fare stores so they would not step in and want this site. 99 Ranch already has two stores in the area.

I just can't imagine that the delay is anything other than they just can't make the finances work with 3 stores here and are having trouble getting rid of that original store.

[storewanderer]

Basically I think H-Mart is stuck because they signed up for two new stores that are practically on top of each other with a 3rd existing store in the middle and their plan hinges on getting rid of that existing store. I suspect that if they can't get rid of it they will proceed on Alton but they will try to find another operator to take the Irvine Blvd. one. Zion operates a very smelly, dumpy old former Vons about a mile down the Blvd. and that is probably who H-Mart wanted to complete with. Ralphs bookends this site East and West on Irvine Blvd. with two very busy Fresh Fare stores so they would not step in and want this site. 99 Ranch already has two stores in the area.

I just can't imagine that the delay is anything other than they just can't make the finances work with 3 stores here and are having trouble getting rid of that original store.

I think H-Mart is making some questionable expansion decisions in general. I don't know how they are funded but they seem to be trying a penetration method that may or may not work.

H-Mart should focus more on consistent operations and then get expansion fine tuned.

They still have 3 separate websites.
https://www.myhmart.com/about
https://www.hmart.com/ourstores
https://www.hmartus.com/

Some of the ones at the OR/WA site look more like c-stores than actual full line stores. At least whatever entity develops the CA ones puts full size stores up. The Vancouver Downtown H-Mart is particularly terrible. I think it is with the OR/WA group.

[ClownLoach]

Basically I think H-Mart is stuck because they signed up for two new stores that are practically on top of each other with a 3rd existing store in the middle and their plan hinges on getting rid of that existing store. I suspect that if they can't get rid of it they will proceed on Alton but they will try to find another operator to take the Irvine Blvd. one. Zion operates a very smelly, dumpy old former Vons about a mile down the Blvd. and that is probably who H-Mart wanted to complete with. Ralphs bookends this site East and West on Irvine Blvd. with two very busy Fresh Fare stores so they would not step in and want this site. 99 Ranch already has two stores in the area.

I just can't imagine that the delay is anything other than they just can't make the finances work with 3 stores here and are having trouble getting rid of that original store.

I think H-Mart is making some questionable expansion decisions in general. I don't know how they are funded but they seem to be trying a penetration method that may or may not work.

H-Mart should focus more on consistent operations and then get expansion fine tuned.

They still have 3 separate websites.
https://www.myhmart.com/about
https://www.hmart.com/ourstores
https://www.hmartus.com/

Some of the ones at the OR/WA site look more like c-stores than actual full line stores. At least whatever entity develops the CA ones puts full size stores up. The Vancouver Downtown H-Mart is particularly terrible. I think it is with the OR/WA group.

They are terribly inconsistent in store cleanliness, decor, size, assortment, pricing and service level. I saw one that recently took over a smaller Ralphs in Cerritos area where they didn't even bother to set up a stock room and just built a three aisle block of pallet racking at one end with a fence around it on the sales floor. The store was dirty and felt like it had been in operation for decades despite opening fairly recently (just a few years I think). It looked like they set the store with all used fixtures but no idea where they came from, the gondola type with pallet racking caps. I swear half the merchandise was not priced and they had lazily thrown signs over those sections that said something in Korean and a translation of Stock Room in English. If it's at eye level on shelves and pegs in an aisle, and it isn't available in another location for the customer then it isn't a Stock Room. Store was packed with people but I didn't see big baskets going out because the place was a circus to shop in.

Then I visited one of their oldest, smallest stores in Garden Grove (was an Alpha Beta in the 80s) and found it to feel as old as I expected yet it was spotlessly clean, brilliantly lit, beautifully merchandised, no odors in the store, best Korean style meat department I've been seen anywhere with incredibly beautiful Wagyu and other ultra premium beef sliced for Korean BBQ and Shabu. I would love to be able to shop that store regularly because I love good Korean BBQ. This store did have zero service culture however and allowed a massive line to form with only one register open and took nearly ten minutes to get the rest open. Because they gave it a bit of a Food 4 Less style maze at the front through the produce section the checkout line quickly blocked all incoming traffic. This was at 4pm on a weekday which of course is all hands on deck time at any grocery store yet somehow all but one cashier were sent on break at the same time? And these customers did wait, on this store they had full baskets and big orders that took a long time to ring up and get the lines back under control. If another competitor was nearby I think they would be able to crush this store despite the otherwise excellent store standards and selection - even a lesser store would be able to excel with just basic good customer service. The worst part is that I slipped and fell outside the exit door - I was down for probably ten seconds before I could get up due to all the foot traffic. I looked inside the doors and at least three employees witnessed the accident but did absolutely nothing. I was not hurt and my clothes were not damaged, but I know it is Retail 101 to immediately get an incident report filed when a customer slips and falls. If their insurance knew they deliberately ignored this they would both fine the store and cancel their coverage. They would find out of course if I filed an injury suit or claim. They must be insured to operate in California so again I was just shocked their employees were not trained to drop everything and act.

These guys have a lot of work to do to create consistency in their operations and procedures. I wonder if they really operate like a franchise, or maybe different family members go out and each own/operate their own store, because they are that wildly different from each other. Their lack of consistency is a threat to their entire operation. Just a few lawsuits from situations like mine could jeopardize the entire chain.

[storewanderer]

These guys have a lot of work to do to create consistency in their operations and procedures. I wonder if they really operate like a franchise, or maybe different family members go out and each own/operate their own store, because they are that wildly different from each other. Their lack of consistency is a threat to their entire operation. Just a few lawsuits from situations like mine could jeopardize the entire chain.

Supposedly each H-Mart is set up as its own LLC to avoid the chain from having liability as you describe. But I have heard of other chains doing that too (CVS used to, not anymore) but it has been challenged so not really sure what it even accomplishes.

Are they franchises?

This Irvine group who let those two Albertsons close and they are still vacant a year later seems to have made a bad decision to go with H Mart.

[ClownLoach]

These guys have a lot of work to do to create consistency in their operations and procedures. I wonder if they really operate like a franchise, or maybe different family members go out and each own/operate their own store, because they are that wildly different from each other. Their lack of consistency is a threat to their entire operation. Just a few lawsuits from situations like mine could jeopardize the entire chain.

Supposedly each H-Mart is set up as its own LLC to avoid the chain from having liability as you describe. But I have heard of other chains doing that too (CVS used to, not anymore) but it has been challenged so not really sure what it even accomplishes.

Are they franchises?

This Irvine group who let those two Albertsons close and they are still vacant a year later seems to have made a bad decision to go with H Mart.

I really wonder if those stores actually closed at end of lease term with new lease signed or if they just transferred the leases with permission to H-Mart. It seems more likely that they were transferred with permission because I don't see Irvine Company happily sitting without incoming rent on buildings in Pre-Open stage this long. They would have given them 6 months tops to remodel and open because they are existing buildings. So H-Mart is probably paying full rent on these closed stores they don't have the money to start construction on. They probably have a deadline to get them open before the lease reverts back to the landlord under continuous operation clauses. IC isn't stupid and always maintains right of first refusal as well so that they are not at the mercy of a rogue chain like H-Mart potentially selling off the rights to someone they don't want. Laugh but I would not be the least bit surprised if at least one of these stores, probably the one on Alton, is reopened as a Vons or Albertsons by the end of the year. The Irvine Blvd. one could also potentially be worked into a deal with Albertsons to take it back and close that Pavilions further north by Orchard Hills if they can find an operator for it. Bristol Farms seems very happy so far with that Spectrum location and their new format, so maybe they'll take the Pavilions problem store. It would be a good fit in that multi million dollar home neighborhood up there. Or if IC is willing to give a discount maybe they can get Stater Bros. to open their first store with them although they will want only 45K Sq ft of the space and these are both around 60K so some reconfiguration will have to take place along with completely new leases.

Off Topic Warning - The right of first refusal is why I firmly believe that Walmart did have a lease directly with IC on that store they closed because as a matter of policy they ALWAYS buy back their leases in bankruptcies to maintain ironclad control. There is zero chance they allowed Sears to transfer that Great Indoors lease intact to Walmart. These clauses do survive in bankruptcy courts too - the only issue that sometimes comes up is that the landlord can get outbid, but they still have the right to put in a superior bid in that situation simply because they are the landlord and the courts have to respect their rights.

[Bagels]

Well over a year later...

- Bass Pro Shops will be opening its second SoCal location (and first in the LA-area) in the former Walmart.

- Both Albertsons' remained shuttered, with H-Mart listed as coming soon. Construction on the Alton location hadn't begun as of late fall, but it appears there's some activity taking place now. Elsewhere it was suggested that H-Mart may not be proceeding with the project, and the building is being used for storage (not sure by whom), so who knows? Allegedly, Aldi was interested in the former Rite Aid space in the same plaza, and Irvine Company said no, so I assume they will have another grocer soon...

The Bass Pro development is interesting... Because Irvine Company was sending paid surveys to local apartment residents that sure asked a lot of questions about that tiny Nordstrom at the Spectrum Center... And asked about 15 different ways if Bass Pro would be a good fit in Irvine Spectrum Center itself. So I suspect that Nordstrom was ready to leave and be replaced by Bass Pro because they're overstored in the area - in fact they now have more units in the area than Macy's after all their closures - but Irvine Company probably has given them a deal to stay until they can work out a replacement. Plus they probably would have had to build more parking garages for Bass Pro and tear down/rebuild the Nordstrom to fit them in. Many years of expensive construction. Then because they were stuck with the white elephant Walmart building and Bass Pro was still on the line they worked out a deal for that center... I'm not sure if there is going to be anything close to enough parking for this store though without customers parking in the middle of the center by the Living Spaces and walking. Walmart was almost unshoppable during weekends and holidays because the parking in front was so limited and the store was completely packed. Still some strange business here..... Bass Pro is both a "most wanted" tenant as well as a opportunistic leaser - they famously want under market rent to go in, basically saying they'll build the traffic for your entire center so you'll still bring in far more rent with them (at a discount) than without them. So they like distressed properties like this. They took a white elephant closed Lowes south of Tacoma along I-5 and it still resembles one - looked like the boats were in the former garden center and they just put some wood trim around the gable shaped sign tower. Guaranteed they're getting less rent from Bass Pro than what Walmart offered.

Probably works better than tearing down everything East of the Living Spaces including the Walmart, former Office Depot etc. and putting more offices there, which was what they were floating with the city. Somehow, I can't explain it, but in this increasingly work from home culture Irvine is dramatically expanding office development and its actually working. Maybe they're on to something - people will work in the office again but it needs to be a new, cutting edge facility that isn't in a gross, congested, distant dump like downtown LA? Irvine Company canceled their new 2500 apartment units off Sand Canyon where the RV dealerships used to be ("Traveland USA") and went with really weird boxy looking offices that all have roll up walls and other features to introduce open air workplaces. Amazon just signed for a bunch of new office buildings off Laguna Canyon.

I'm not certain The Irvine Company (IC) could've realistically transformed the former Walmart space into anything else other than retail. It would've been a horrible place to build apartments -- it's a heavily industrial/commercial area that backs up to the 5, the there's insufficient space to build a village-type community to conceal it. And the area is saturated with commercial offices... IC has built numerous structures in recent years (much of the space isn't "officially" available, to keep statistics looking good) and during the COIVD era, some big names that had committed to them walked away - not only because of work from home, but also because the inventory of available housing has really tightened (average advertised apartment rents have swelled). Not to mention some big names have left in the last year, lead by Wells Fargo (which abandoned a large office that had been here for decades, dating back to First Interstate IIRC), T-Mobile (former Boost Mobile HQ, which became a T-Mobile research lab after it acquired Sprint), etc. Not to mention that Taco Bell is allegedly hunting for office space in Texas, and is seeking smaller real estate near Irvine for transition (e.g. to house the employees that won't move to Texas, until they are replaced). Besides, Irvine refused to allow IC to demolish the struggling Woodridge Village Center and replace it with apartments, which would've been a good thing.

I never saw the Walmart space listed as available, which makes me wonder IC's intentions. Allegedly Walmart was expecting to stay and closed shop only because IC wouldn't budge from unreasonable rent demands (that included a % of its gross sales). IC spent tons of cash re-doing the parking lot configuration around Walmart in the months before it closed, which never made a lot of sense. Some grumblings were that they were trying to get Lifetime Fitness to build out the space, so the entire Portola retail development plan could be dropped. Gotta wonder if Bass Pro was always Plan B? With the closure of Macy's, one would have to think Nordstroms is still a bigger draw than Bass Pro for the Spectrum Center. It'll be a better addition where it's going... In-N-Out was rumored to build (replace Wendy's, IIRC) at the site for the last several years, which may help explain why that entire entrance was redone. Gotta wonder if it's why that Wendy's now closes at 11PM, when pre-COVID, it shuttered at 8PM. But if In-N-Out and Bass Pro had built out... just think of the traffic!

[Bagels]

Well over a year later...

- Bass Pro Shops will be opening its second SoCal location (and first in the LA-area) in the former Walmart.

- Both Albertsons' remained shuttered, with H-Mart listed as coming soon. Construction on the Alton location hadn't begun as of late fall, but it appears there's some activity taking place now. Elsewhere it was suggested that H-Mart may not be proceeding with the project, and the building is being used for storage (not sure by whom), so who knows? Allegedly, Aldi was interested in the former Rite Aid space in the same plaza, and Irvine Company said no, so I assume they will have another grocer soon...

Albertsons has historically been very good at putting anti-competitor lease restrictions in place - but Alton was a Lucky before so probably never had that language. But Sprouts is in the same center on Alton and they probably did put some language in that no additional grocery can open there besides the existing Albertsons space. Sprouts plus H-Mart plus Aldi next door to each other isn't going to work. So Sprouts is probably the real reason for Aldi being declined, if they really were. And Sprouts might want that Rite Aid too because their current box is really off the beaten path and they are moving forward with their new downsized store initiative under the former 99 cents store CEO.

(Off topic but I wonder if those lease restrictions hurt more than they help - two Targets still don't have P-fresh in Murrieta and Aliso Viejo because of the lease restrictions - I'll bet the Albertsons and now Stater Bros there would do better if Target did carry food because people avoid these locations and drive past them for a full line store)

The original Irvine H-Mart at Alton and Jamboree has a terrible parking configuration that severely impedes their sales ("Diamond Jamboree" - ain't a diamond at all) and I would imagine that they would close that store to move to the larger former Albertsons a few blocks down - really don't see them running both stores. I wonder if the delay is waiting for the lease to be up on the old store so it can close and relocate? No way they make a profit on these two next to each other especially when the Irvine Company location probably is top rent.

The other location, a former Albertsons on Irvine Blvd. is rather infamous for a violent incident that took place years ago. This location didn't seem to do much business as an Albertsons. For reasons I can't comprehend other than a likely rent discount they reopened a divested Haggen as a Pavilions a few blocks north that was even deader than this Albertsons. Only thing I could think of is that Albertsons wanted a smaller square footage and that's why they reopened the Haggen divestiture when it became available again, enabling the closure of the Albertsons that went to H-Mart while leaving them with a near monopoly on that market. If H-Mart can't get out of that original Jamboree location then once again there is little chance they can profitably operate both of these stores either as they're too close.

Basically I think H-Mart is stuck because they signed up for two new stores that are practically on top of each other with a 3rd existing store in the middle and their plan hinges on getting rid of that existing store. I suspect that if they can't get rid of it they will proceed on Alton but they will try to find another operator to take the Irvine Blvd. one. Zion operates a very smelly, dumpy old former Vons about a mile down the Blvd. and that is probably who H-Mart wanted to complete with. Ralphs bookends this site East and West on Irvine Blvd. with two very busy Fresh Fare stores so they would not step in and want this site. 99 Ranch already has two stores in the area.

I just can't imagine that the delay is anything other than they just can't make the finances work with 3 stores here and are having trouble getting rid of that original store.

The former Albertsons off Alton is huge... former Lucky built circa 1990 that significantly expanded in the early 2000s by demolishing neighboring store, and took on the Jewel interior. That store has got to be close to twice the size of the existing HMart off Alton. It looks like it was the prize -- I saw Albertsons taking measurements, and rumor was that they were going to shrink the store (that they had expanded 20 years earlier) before the shock announcement. Some of the early reports were that HMart planned to put a food hall in the store. The Irvine Blvd. location was likely a bargaining chip to get this store. But the surrounding area is still largely white, and the surrounding shopping centers (including Crossroads) are still targeting largely white people. That's in contrast to the Diamond Jamboree, or even Northfield, which is now largely surviving a Chinese immigrant area.

Still, it's not good to have these two huge boxes open, when they could've still been Albertsons. Maybe we'll get a Stater Bros., which I'd personally welcome a lot more...

[storewanderer]

I really wonder if those stores actually closed at end of lease term with new lease signed or if they just transferred the leases with permission to H-Mart. It seems more likely that they were transferred with permission because I don't see Irvine Company happily sitting without incoming rent on buildings in Pre-Open stage this long. Laugh but I would not be the least bit surprised if at least one of these stores, probably the one on Alton, is reopened as a Vons or Albertsons by the end of the year. The Irvine Blvd. one could also potentially be worked into a deal with Albertsons to take it back and close that Pavilions further north by Orchard Hills if they can find an operator for it. Bristol Farms seems very happy so far with that Spectrum location and their new format, so maybe they'll take the Pavilions problem store. It would be a good fit in that multi million dollar home neighborhood up there. Or if IC is willing to give a discount maybe they can get Stater Bros. to open their first store with them although they will want only 45K Sq ft of the space and these are both around 60K so some reconfiguration will have to take place along with completely new leases.

I don't see how it is viable for H-Mart to keep paying rent like that. They could have just reopened the stores with minimal remodeling also. Was the equipment/fixtures left in the store even auctioned off or is it all just sitting?

My guess is IC did not forecast H-Mart's behavior very well.

H-Mart is signing on to multiple questionable projects; stores in downtowns that are having real issues and offices are leaving in droves (of course people will counter that hundreds/thousands of apartments/condos are about to come online in those same downtowns).

[Bagels]

IC lists Westpark (Alton) as opening summer 2022:
https://www.shopirvinecompany.com/cente ... aza/h-mart

and Northpark (Irvine) as opening late summer 2022:
https://www.shopirvinecompany.com/cente ... aza/h-mart

[pseudo3d]

I think I've only been in one H Mart that doesn't have a food hall. I've been to three of them. The first was in a former Randalls, where most of the old perishable departments were turned into a food hall (a new seafood department was built in the back, H Mart's seafood department is unusually designed). The second one was in Houston's "Chinatown" and much smaller (but still had the French bakery). The third one was in Austin and I believe it is their largest store at around 69k square feet.

It's made up of a former Sports Authority and Bed Bath & Beyond, half of it is the food hall area, the other half is the main grocery store (there's a large ramp in the front to connect to the two halves).