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San Diego
Thursday, May 30, 2024
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UTC Mall Undergoing ‘Luxury Expansion’

RETAIL: 2 New Buildings Add Storefronts, Dining

SAN DIEGO – The original site of Nordstrom’s at the Westfield UTC mall is being redeveloped into new storefronts and restaurants aimed at adding to the center’s appeal to high-end shoppers and diners.

The mall’s owner, Unibail-Rodamco-Westfield, based in Paris, declined to disclose the cost of the renovations that will include adding 50,000 square feet of space in two separate buildings on the west end of the mall.

Scheduled to be finished in 2026, the latest renovations are what Kim Brewer, senior vice president of development, said are “a luxury expansion of UTC.”

Kim Brewer
SVP, Development
Unibail-Rodamco-Westfield

“We had always envisioned kind of this last piece to close off that portion of the (shopping) center, and so now we’re advancing and starting that project,” Brewer said. “We continue to invest in the shopping center because it’s a world class shopping center for sure.”

The expansion will entail construction of a 30,000-square-foot building and an adjacent 20,000-square-foot building with new shops and two restaurants – one restaurant on the ground floor level and another restaurant on the second level at the top of an escalator that leads from a drop-off for valet parking.

“Those two new buildings will have amazing high-quality finishes” with the design details up to the tenants.

Brewer said that 80% of the new space has been leased, but she declined to name the new tenants, adding that they would be on a par with the existing shops and restaurants.

UTC provides “a different level of food and beverage” and “really unique, first-to-market retail,” Brewer said. “We really custom tailor all of our design, all of the amenities, the merchandise, to the market we’re in. You see some centers that are kind of cookie cutter, everything the same – the same retailers are in.”

Momentum Building for Retail

The new section and those already there are meant to make the mall feel like a “high street” in upscale urban shopping districts, like Rodeo Drive in Los Angeles or Bond Street in London, Brewer said.

“We’re creating a community environment. We want a place that people feel comfortable in,” Brewer said. “You add that to the world-class retail and the amazing food and beverage, and you get a really good product.”

Brewer said that UTC has “an affluent customer base” with an average household income of more than $160,000, adding about 26% of UTC shoppers have an annual household income of more than $200,000. Their average age is about 36.

The expansion of UTC comes at a time when demand for retail space remains high in San Diego and with little in the way of new retail construction, according to CBRE, a commercial real estate brokerage.

In the first quarter of 2024, the vacancy rate for retail space county-wide was holding at 4.6%, below the 2017-2019 average, according to CBRE.

“A lack of new product has helped keep occupancy tight,” CBRE reported. “Only two small-scale projects have delivered since 2020, with most recent development coming online in Q1 (first quarter) 2023.”

The brokerage reported that “new retail space has been a rare sight in this decade in San Diego, and it appears that will continue in 2024.”

Brewer said the foot traffic in the UTC mall is about 16% higher than it was in 2019 prior to the COVID pandemic.

“We continue to see momentum building from the pandemic, for sure,” Brewer said.

Investing in ‘Important Market’

The old Nordstrom building, and some adjacent shops, were razed in 2002, leaving a dirt lot for the latest expansion of the mall that Unibail-Rodamco-Westfield has owned since December 2017, when the company took over Westfield Corp.

In 2019, Unibail-Rodamco-Westfield added a residential element to the mall with the opening of the 23-story Palisade at Westfield in a portion of the parking lot with 300 apartments.

Brewer left open the possibility of adding more residential and further expanding the mall.

“San Diego, for us, is a really important market. We’ve had a longstanding position in the market, and we’re continuing to look at how we can continue to enhance and invest based on what’s already on the ground there,” Brewer said.

“We are really looking at how we become this live, work, play environment.”

Unibail-Rodamco-Westfield
FOUNDED: 2007
HEADQUARTERS: Paris
CEO: Jean-Marie Tritant
BUSINESS: retail center developer and operator
EMPLOYEES: 2,600
Website: www.urw.com
CONTACT: 858-546-8858
NOTABLE: Unibail-Rodamco-Westfield operates 72 shopping centers in 12 countries, including 38 shopping centers under the Westfield brand. The centers tally more than 900 million visits annually.

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