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Thursday, Oct 6, 2022

Mixed-Use Decisions Need to Consider Future Market Demand

Master planners of large, mixed-use communities face a challenge similar to assembling a jigsaw puzzle. They must not only make their projects pencil-out financially in today’s market, but also gauge whether the urban-style elements that consumers want now will still play with prospective homebuyers 10 or 20 years later.

Developers at a recent forum in downtown San Diego, presented by the local chapter of the Urban Land Institute, said the puzzle pieces that must fit together include providing what urban-

oriented young workers and families are looking for in a dwelling, offering public transit access, creating jobs on-site and making sure that workers and visitors have places to park. And all this while giving the development a unique sense of place.

“People want places where they’re comfortable just parking the car on a Friday, and not having to get back in their cars until Monday,” said Gary Levitt, founder and president of Sea Breeze Properties LLC in San Diego.

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Levitt’s company is part of a venture at work on North City, a multiphase San Marcos development with a built-in youth demographic. Already built are several buildings, in a hub known as The Quad, consisting of dorm-style apartments built specifically to house students attending nearby California State University, San Marcos.

North City could have up to 2,600 new residential units at full build-out, along with several million square feet of offices, retail and other commercial elements across several phases.

Mixed-use projects, however, face the challenge of being many things to several generations, said Rita Brandin, a senior vice president with San

Diego-based residential developer Newland Communities.

The company has several developments nationwide, including the 4S Ranch community near Rancho Bernardo. Among the hallmarks of its recent projects, Brandin said, is that they consist of several smaller communities with housing of various product types and sizes, all connected by trails and public parks to make them walkable.

Diversity of product type is crucial to serve a consumer base that can include young adults still living with their parents for economic reasons, adults taking care of elderly parents, and retirees and near-retirees seeking to downsize their home-maintenance requirements.

“And not everybody wants to rent,” Brandin said.

Corky McMillin Cos. has tried to carefully calibrate its mixes of homes, offices, open space and commercial elements as it plans the multiphase Millenia in Chula Vista, said Todd Galarneau, senior vice president and project manager with the San Diego-based developer.

Millenia is slated to have up to 3,000 for-sale homes and apartments at full build-out. One advantage of a gradual, phased-in approach, Galarneau said, is that the developer does not have to lock itself into one product type, but can plan future phases in response to changes in housing market demand.

• • •

Oceanside Sears Store Franchised: Franchising works well in the world

of fast-food burgers and fried chicken, but does it work for off-price appliances and tools bought at Sears? Oceanside shoppers are now finding out for themselves.

Sacramento-based franchise company Marlu Investment Group, led by Tony Lutfi, recently took over and re-opened the Sears Outlet Store at 2505-B Vista Way. The Oceanside store is now one of 10 nationwide owned and operated by Lutfi’s company, along with 17 Sears Home Appliance Showrooms and three Sears Appliance & Hardware Stores.

Illinois-headquartered Sears and Marlu did not disclose terms, but the Oceanside arrangement stems from a 2012 move by the long-struggling Sears Holdings Corp. (Nasdaq: SHLD) to spin off its free-standing outlet, hardware and appliance stores into a new company, known as Sears Hometown and Outlet Stores Inc. (Nasdaq: SHOS). Sears has since signed agreements with 34 franchisees operating 198 locations nationwide.

According to Sears, Lutfi began working as a cook at Jack in the Box while attending college in Northern California, shortly after immigrating to the U.S. from Lebanon. Marlu, started in 1991, also franchises more than 120 restaurant locations in six states, including Jack in the Box, Arby’s, Church’s Chicken, Little Caesars and Sizzler.

• • •

More Places for Food: New Jersey-

based Cups Frozen Yogurt has growth plans that include San Diego, with the recent signing of development agreements representing 26 franchise units

in Southern California.

Locations are yet to be announced, and the new franchisees include Coley Inc., led by Steve and Deanna Coley of Carlsbad, whose agreement calls for opening nine units in San Diego and Orange counties over the next five years.

Cups has 20 locations operating, most of them are in New Jersey and New York.

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


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