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Discount Retailers Are Taking Big Space in California's Inland Empire

CoStar Market Insights: Bob’s Discount Furniture, Burlington Coat Factory and Others Expand
July 16, 2018
Upland Village Center Building leased by Ross.

Many of the largest retail leases executed since the start of 2018 involve discount stores in the Inland Empire of California, extending a nationwide trend.

Bob’s Discount Furniture, which has been expanding throughout California, is scheduled to open two stores in the Inland Empire later this year, including a 42,000-square-foot store in Redlands and a 40,000-square-foot store in Palm Desert. The Redlands location is to fill the void left from a Sports Chalet that closed in 2016, while Sports Authority last occupied the Palm Desert location, also in 2016.

Burlington Coat Factory and Ross leased 40,000 square feet and 24,000 square feet, respectively, in the Upland Village Center, taking a big box store last occupied by Dick’s Sporting Goods in 2007. The two retailers also plan to take 43,000 square feet and 22,000 square feet in the Rialto’s Renaissance Marketplace, a new 410,000- square-foot shopping mall that is slated to deliver by the end of this year.

Five Below opened an 8,000-square-foot store in the same Renaissance Marketplace this month and has leased 10,700 square feet in the Desert Crossings Shopping Center in Palm Desert, the same shopping center where Bob’s Discount Furniture intends to open.

DD’s is opening an 18,000-square-foot store in a Hesperia shopping center, anchored by Stater Bros. and 99 Cents Only has preleased 19,000 square feet in a stand-alone building that is currently under construction in Corona.

The list goes on.

Discount retailers are not new to the Inland Empire. But this growing trend, which has also spread across most of the United States, is helping landlords fill big box space that has been left behind by companies struggling to stay afloat or closing down operations all together like Sports Chalet, Sports Authority, Sears/K-Mart and Toys R Us.

Furthermore, the Inland Empire is an attractive destination for transplants from L.A., Orange County and San Diego County, who are searching for affordable housing. It stands to reason that these residents favor retail stores that offer affordable items as much as they favor affordable housing, which could provide a sustainable flow of revenues for discount retailers.

CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

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