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NEW COSTA MESA CENTER TO FOCUS ON HOME FURNISHINGS

By Karen M. Kroll

South Coast Home Furnishings Centre aims to be the hub for the growing furnishings trade in Costa Mesa, Calif. The 300,000-square-foot project was inspired by a cluster of home furnishings retailers already doing booming business along Costa Mesa’s 405 freeway.

“Scores of home furnishing tenants had found store location opportunities up and down a one-mile radius off the freeway,” said Brandon Birtcher, president of the project’s developer, Birtcher Development and Investment Co. The stores enjoy great visibility, but there is limited access to them off the freeway, Birtcher says. And because the retailers operate stand-alone units, customers have to drive from store to store to comparison shop. South Coast, on the other hand, will offer a variety of home furnishings retailers within a single location, Birtcher says. Consumers will be able to pick up furniture, bedding, lighting, floor coverings, home theater equipment and outdoor furniture, among other items.

The development will consist of nine buildings encircling a parking lot, with room for about 30 tenants. They will range in size from 1,000 square feet to 40,000 square feet, though most will measure between 4,000 square feet and 7,000 square feet. Site plans also call for a 20,000-square-foot food court.

Construction is scheduled to begin this fall and Birtcher says South Coast should be completed by October of next year. The total price tag for the purchase of 20 acres of land, the demolition of an existing building and the development of the new center will run about $90 million.

The open-air design of the mall will help minimize such costs as security and common-area heating and cooling. As a result, lease rates will be about two-thirds those charged in many enclosed centers, says Mike Abel, a senior vice president at Lee & Associates, Newport Beach, Calif., which is handling the leasing of South Coast. This is critical, as pretax income margins in home furnishings typically hover around 2 to 3 percent, says Patrick West, head of West Retail Consulting, Jupiter, Fla. (The firm has had no dealings with the South Coast project.) That makes it difficult for furniture merchants to cover typical mall rents.

The center is about 50 percent preleased, says Jim Snyder, a senior vice president at Lee. Birtcher would not identify specific retailers slated for the center, though he did say that they would include national and regional names relocating from elsewhere in Orange County, home to Costa Mesa, as well as national retailers new to the area.

South Coast’s target market extends about 20 miles from Costa Mesa, says Birtcher. Orange County boasts a population of about 3 million, according to the U.S. Census Bureau, at least 10 percent of households report income exceeding $100,000 a year, and about 9 percent of the homes are valued at $300,000 or more.

About a half mile down the road from South Coast is an Ikea store. Though many of South Coast’s retailers will offer mid-to-high-price merchandise, the proximity to Ikea, with its appeal to the bargain-minded, offers “tremendous synergies,” said Birtcher. Many people are willing to splurge a bit when purchasing furniture for their living rooms and dining rooms, but they tend to keep a tighter budget when outfitting the children’s rooms and play areas. “Within a few blocks, you can get everything you want for your home,” said Birtcher.

South Coast is not the only shopping center geared to home furnishings. In 1993 Coral Springs, Fla.-based Amera Corp. opened Design Row, an open-air home furnishings center in Coral Springs. Early this summer crews broke ground on a 30,000-square-foot expansion scheduled for completion by year-end. Tenants there include Barbeques Galore, Patio Shoppe and Southwest Sensations. HomeWorks, in Jeffersonville, Ohio, is another. Built on the site of an unsuccessful outlet mall by The Boyle Group, Berwyn, Pa., HomeWorks was 60 percent leased as of mid-July. Tenants include Amish Heritage Furniture, The Backyard Outlet and Mikasa.

“There definitely is a trend to home-oriented centers,” said Jaclyn Hirschhaut, a spokeswoman for The American Home Furnishings Alliance trade group, based in High Point, N.C. Consumers find them convenient, she says, and the stores benefit from the foot traffic.