Realtor notes a promising decline in commercial vacancies in La Jolla
By Pat ShermanThroughout La Jolla Village fresh faces are replacing formerly vacant commercial spaces, including the addition of several new eateries and an Italian Market.
Phil Wise, senior vice-president at Colliers International real estate, said a recent decrease in “For Lease” signs in storefront windows shows the commercial real estate market in La Jolla is improving.
Colliers recently completed a survey of 163 commercial properties in the Village, comprising 1,331,947 square feet of retail space. The survey showed that the total amount of vacancies was less than 70,000 square feet, or 5.24 percent.
When subtracting the vacant, three-story former site of Jack’s La Jolla, which closed in 2009 due to nonpayment
of state taxes, the vacancy rate drops to just 3.34 percent, he said.
When Wise conducted the first such quarterly survey for Colliers on April 1, 2011, the vacancy rate was 7.18 percent, or 98,963 square feet.
“In a three-month period, this is amazing,” Wise said. “This should be front page, national news.”
Wise concedes that there is some margin of error. Merchants may enter and exit the Village at whim, as evidenced by the closure this month of a Bruegger’s bagel shop at the corner of Pearl Street and Fay Avenue.
However, Wise said the recent “positive absorption” or influx of new commercial business in the Village follows a period from 2008 to 2010 that saw a steady attrition of commercial businesses in downtown La Jolla.
“What that means is that rents are going to start going up again,” Wise said.
New in La Jolla is a recently opened franchise of Jersey Mike’s Subs, which occupies 1,326 square feet of space at 7836 Herschel Ave. Across the street, exciting renovations are taking place at the future site of Herringbone, the latest fusion eatery from restaurateur Brian Malarkey and nightlife visionary James Brennan.
The $2.5 million venture is scheduled to open April 12 in the long-vacant, roughly 7,500-square-foot space at 7837 Herschel Ave. (between Silverado and Wall Streets).
The project is being developed by Jaime Construction and Jaime Partners in concert with La Jolla-based Marengo Morton Architects.
The building, which will undergo substantial structural retrofits, will house Malarkey and Brennan’s latest marriage of food and nightlife, featuring an ocean bazaar theme. Designer Thomas Schoos, who tackled the exotic décor of Malarkey and Brennan’s existing ventures, Searsucker and Burlap, is onboard for Herringbone.
With the addition of Eddie V’s seafood and steak restaurant, which opened last fall on Prospect Street, Wise said he sees this new “synergy” enticing more business to the Village.
“It gives hope to other non-restaurant users: ‘If they can make it, I can make it,’” Wise said.
Scheduled for an early 2012 opening is Puesto Mexican Street Food, at 1026 Wall St. The brainchild of sibling La Jolla High graduates Alan and Eric Adler, the menu will feature San Diegans beloved street tacos, and include stewed meats called guisados, shrimp, salmon, carne asada, salads and soy chorizo potatoes.
Poised to open at 7441 Girard Ave. is Ariccia Italian Market. Named for an Italian town in the province of Rome that is home to the savory pork roast, Porchetta, the market will offer fresh pastas, cured meats, cheeses, panini sandwiches and soups.
Ariccia co-owner Robert Pascucci said he and partner Stephanie Savchuk chose a business location where they wouldn’t mind spending their busy work days.
“I’ve always had an attraction to La Jolla,” said Pascucci, a native of Boston. “It always had that Mediterranean feel to it. It always feels like you’re on vacation.”
The site is part of the recently renovated Shepard Trust buildings, which includes a vacancy at 7456 Girard Ave., formerly home to Mauldin home furnishings, which is set to reopen this month at 7755 Fay Ave.
Mike Slattery, a commercial real estate broker with Cassidy Turley BRE Commercial, orchestrated the five-year, $348,222 lease of 880 square feet at 1241 Prospect St., set to open in the next few weeks as Krafty Krepes. The mainly take-out eatery will serve an array of custom breakfast, dessert and savory crepes.
Slattery said signs that the commercial market is improving in the Village have been evident for months.
“Business activity is picking up, I think there’s an optimism that the economy is turning the corner a little bit,” Slattery said. “When you see vacancies, it doesn’t mean that they haven’t been leased. It just takes some time for them to open up.”
Wise, who in the 1980s witnessed businesses flee the Village for lower rent spaces in the then burgeoning UTC development, and rode the real estate backlash of the early ’90s savings and loan scandal, said the recent revival is heartening.
“Every tourist comes to La Jolla and walks on Prospect Street, and some of those people stay,” he said. “It’s a very attractive location.”