An outdoor mall in Northern California that underwent a pandemic-era makeover is close to reaching full occupancy.
National floor coverings brand Floor & Decor has signed a 55,000-square-foot lease at The Ranch, a 170,000-square-foot shopping center off the Interstate 80 freeway in Vacaville, California, according to landlord FH One Investments. The company said the new tenant will bring the retail property to 99% occupied.
The San Francisco Bay Area-based investment and management firm purchased the 1970s-era mall, formerly called Alamo Plaza, in the early 2000s when it was only around half leased. The new owners embarked on an update of the property to attract more tenants and transform the center “into a thriving retail hub,” the firm said in a press release.
The move took advantage of a trend that has seen retailers pulling out of traditional malls and moving to suburban, open-air shopping centers. Those anchored by grocery stores have been particularly sought after by investors, as flexible work schedules since the COVID-19 pandemic spurred more traffic to neighborhood retail centers throughout the day.
Rising occupancy rates in these retail centers have caught the eye of big institutional investors. Regency Centers, one of the nation’s largest shopping center owners, recently acquired five retail properties in a $357 million deal in Orange County; Simon Property Group is investing in mall upgrades in some of its better-performing suburban markets; and New York-based Cohen & Steers has undertaken a flurry of acquisitions of open-air shopping centers for its private real estate clients.
A combination of low levels of new supply and renewed demand for stores from reinvigorated businesses has turned these modest shopping centers into the most highly occupied of any major commercial property type in the United States, according to a Cohen & Steers report from last September.
At least $10 billion worth of U.S. open-air retail portfolios is expected to change hands in 2025, according to CBRE. Retailers "are now looking to smaller-format open-air suburban centers for expansion," the firm said in a report.
New life
FH One’s renovations to the Vacaville property in the last few years sought to capitalize on that trend, adding new landscaping and pedestrian paths, play structures for kids, public restrooms and refreshed outdoor dining areas.
Renovations at The Ranch added a 70-foot tower feature that aimed to be a landmark, the company told a news channel in 2023.
The shopping center has since inked several new tenants. Floor & Decor is slated to open early next year, joining Bodyrok, a soon-to-open Pilates studio, and DogStop, a premium dog grooming service, as well as Round Table Pizza, Kiddie Academy, Sky Zone Trampoline Park, Live Music Center, Journey Coffee and several others.
“The Ranch has proven to be a compelling destination for top-tier brands,” said FH One President Daria Hosseinyoun.
Family-owned FH One’s portfolio consists of a mix of office, multifamily and retail properties.