The Gateway Retail Center in Marin City, which has been plagued by leasing struggles since its inception has a new owner, who has committed over Two Million dollars on improvements including painting the center, new awnings and landscaping. This is an effort to attract new upscale retailers not currently in Marin County. The center has attracted  Babies ‘R Us to occupy the 23,000 Square Foot former Linen’s and Things. This will be one of the first Babies ‘R Us in the entire Bay Area. Gateway has also attracted Starbucks and Panda Express to join Best Buy, Ross Dress for Less, and Longs Drug.

 I predicted in last years article, Strawberry Village in Mill Valley, was sold for $70,000,000, which amounts to a sale price per foot of just under $600 / SF. This is a record price that I have seen for a neighborhood shopping center in Marin County. This property had over sixty bidders, trying to place their money in Marin County. Larkspur Landing sold just last year for approximately $60,000,000, or $345 / SF.       

Two popular restaurants debuted in 2004, specifically, the wildly successful Cheesecake Factory opened at the The Village at Corte Madera to long waits, huge food, and great desserts. E&O Trading Company, who has locations in San Francisco, San Jose, and Honolulu, opened in Larkspur Landing to terrific reviews and good crowds. Combined with Noonan’s Bar and Grill, Larkspur Landings vision of a Lifestyle center is finally taking shape.

In San Rafael, the former Marin Outdoors building has been leased to Smart and Final. Smart and Final, a publicly  traded company,  is a non-member warehouse store that caters to small businesses and restaurants. Also in San Rafael, an unnamed large electronics store is vying for a rare freeway fronting location to locate a new store. This retail store would be a demolition of an outdated industrial building, making way for a much higher and better use of the property, both in terms of servicing the residents, and providing much needed tax revenue for the City of San Rafael. Michaels Crafts, who has over 450 locations throughout the United States replaced the former Albertson’s store at Northgate III shopping center in Terra Linda, and has opened well above expectations.

In Novato, Whole Foods finally announced deal to be in downtown Novato at the east end of Grant Ave. This announcement is tremendous news to both residents of Novato and downtown merchants, who have been actively seeking Whole Foods for several years. Also in Novato, Albertsons has put the former Nave Lanes site out to bid for sale. This 8.5 acre site is one of the last freeway fronting sites left in all of Marin County. I expect the sale to attract 20 plus bidders, and will have a new owner by the middle of 2005.

I continue to predict that interest rates will edge up, but only slightly throughout the entire year of 2005. If this assumption is correct, Marin County retail properties will continue to enjoy historic interest from both local and national investors, and demand will far outweigh supply. Leasing will continue strong with vacancy rates at well below five percent, and virtually non-existent for well located space. Cap rates will continue to drop to numbers that have not previously been seen. Can’t wait to see it unfold in 2005!