Rehabbing Fairview Shopping Center

Fairview Center was a 190,000 square foot shopping center located in Goleta, California, a northern suburb of Santa Barbara with very good demographics. It was originally built in the 1960's and had never been updated. Vons, Rite-Aid, Orchard Supply, Wells Fargo and a mix of regional and local tenants anchored the center. The value of the center was approximately $32 million.

The owners originally believed that after 35 years it might be best to sell the center and take their profits. FMG recommended re-developing the property due to its excellent location, good demographics and current tenant roster. We began by talking with the current tenants to determine their future plans for this location. Vons expressed a strong desire to expand their current operation, a decision that was very instrumental in moving forward with the re-development. Despite the fact that Vons had over 10 years remaining under their current lease for a 28,000 square foot store, we were able to re-negotiate a 25-year lease for a new 40,000 square foot store at slightly below market rents (but a substantial increase over their current lease rates) and they paid for the construction of the new store.

Once that lease was signed, a plan was put into place to rehab the entire center and FMG was able to motivate the other larger tenants to cooperate, as well as attract new national tenants to the center. We also decided to maximize the center's total square footage and added approximately 30,000 additional square feet to the center. We built a new 35,000 square foot store for Bed, Bath & Beyond, added an 8,000 square foot professional building, relocated all of the local smaller tenants to one part of the center by creating a "village area with a small outdoor food court" and worked with the regional theater on-site to build a new three screen theater at their cost. When we were finished, the center looked like new, with a fresh identity.

In the end we increased the annual rents by over 100% and the value by 35%. The center continues to be a great asset for the owners, as well as for the tenants and the community. It was a win-win project for everyone.

Case Study 3 Fairview Shopping Center – Rehabbing to Increase Tenant Rents and Leaseable Square Footage

Case Study 3
Fairview Shopping Center – Rehabbing to Increase Tenant Rents and Leaseable Square Footage