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Entrances, Exits, and Expansions Keep Grocery Sector Active

San Diego County’s grocery venues continue to multiply at a dizzying pace. In some cases, it’s because companies fail and leave prime spaces ready for newcomers to swoop in and take their place; at other times, it’s the classic case of retailers simply chasing new residential rooftops.

In the category of replacement players, San Diego will soon see the arrival of yet another new entrant, Jensen’s Finest Foods, a small-format grocer that recently acquired a Point Loma space vacated last year by the bankrupt Fresh & Easy Neighborhood Market.

Jensen’s is based in Blue Jay, and all of its eight current stores are in the Inland Empire — half in the Palm Springs-Palm Desert area, and half in San Bernardino County mountain towns including Blue Jay and Cedar Glen. Company leaders have said the Point Loma store will open in about six months, with features including a deli with fresh-prepared foods.

Fresh & Easy’s demise has also cleared the way for Barons Market, another growing small-format grocer, to spread its wings. Point Loma-based Barons recently announced a winter 2016 opening for what will be its seventh location, at 3231 E. University Ave. in North Park.

CVS Pharmacy was also able to obtain two San Diego County spots out of Fresh & Easy’s bankruptcy proceedings, but it was forced to back off when neighbors objected to its bid to take over the Catalina Boulevard space in Point Loma that subsequently went to Jensen’s.

Meanwhile, discount grocer Smart & Final continues to convert and reopen the 11 local leased spaces that it purchased from bankrupt grocer Haggen Inc., with recent debuts in locations including Carlsbad, Coronado and San Diego’s Tierrasanta.

In terms of retail growth, northern San Diego neighborhoods, including Pacific Highlands Ranch and Del Sur, are now seeing the results of hundreds of new homes built during the past decade. A site in the Del Sur neighborhood, in the northern part of the city’s master-planned Black Mountain Ranch, is among 12 U.S. locations where Phoenix-based Sprouts Farmers Market recently announced plans to open new stores during the third quarter of 2016.

The fast-growing Sprouts — led by second- and third-generation members of San Diego’s Boney family, which founded Henry’s Farmers Market in the early 1940s — runs more than 220 U.S. stores and plans to open a total of 36 stores during calendar 2016. There are currently 20 Sprouts in San Diego County, including several former Henry’s, and the only new one announced so far for the local market will be at 16415 Paseo Del Sur.

That location is not far from Del Sur Town Center, a Target-anchored property opened at 17170 Camino Del Sur in late 2015 by Shea Properties. The developer recently announced the addition of new tenants including CurBar, an upscale nail salon; The Bike Shop, selling and servicing bicycles; Del Sur Ranch Dental; and the latest location of San Diego-based Burger Lounge.

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Offices Planned at Chula Vista’s Millenia: Chesnut Properties LLC of Del Mar has purchased a seven-acre lot within Chula Vista’s budding Millenia mixed-use development for approximately $2.56 million, with plans in the works for what could eventually be a 2-million-square-foot office project.

According to CoStar Group and public data, the buyer exercised an option based on a price agreed to a year ago with the parcel’s seller, Dallas-based Stratford Land, the master developer at Millenia.

In its own statement, Chesnut Properties said grading has begun on the first phase of Millenia Office, which will include two four-story buildings totaling 318,000 square feet, a 1,200-space parking structure, and a 7,000-square-foot fitness center and café complex. Plans also call for a new Chula Vista city library spanning approximately 40,000 square feet.

Chesnut Properties, led by Principal Lee Chesnut, has previously developed office and research-and-development projects at University Town Center and Sorrento Mesa, as well as Mesa and Tempe in Arizona. The developer has an option to later purchase the rest of a larger 28-acre site at Millenia where more corporate components are planned in coming years.

The development team for Millenia Office also includes contractors DPR Construction and C2 Building Group, and architecture and design firms Gensler, Project Design Consultants and OJB.

The larger 210-acre Millenia project, being overseen by locally based Meridian Development, has several apartment and single-family housing components in various stages of construction and planning by several developers, along with a hotel and two planned parks. In addition, San Diego’s Sudberry Properties is planning a 135,000-square-foot retail center to serve the development.

Long-term plans for the multiphase Millenia call for more than 3,000 homes, with 2 million square feet of offices, 1.5 million square feet of retail, and numerous public open spaces and civic amenities. Various developers are expected to invest a total of more than $4 billion over the next several years.

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More Retail Tenant Arrivals: Among the new tenants at Del Mar’s Flower Hill Promenade is Cryo Shield, a new cryotherapy treatment center operated by San Diego Padres pitcher James Shields. It offers whole body cryotherapy, billed as a cutting-edge treatment that uses liquid nitrogen to promote body healing, similar to the benefits of an ice bath but more amplified.

Also in Del Mar, property owner Donahue Schriber recently announced an expected summer opening for Bushfire Kitchen at its Beachside Del Mar retail center. A statement said Bushfire, which also has restaurants in Carlsbad and Temecula, offers “healthy, sustainable meals at a family-friendly price point.”

Send commercial real estate and development news of general local interest to Lou Hirsh via email at lhirsh@sdbj.com. He can be reached at 858-277-8904.

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