San Diego's newest retail attraction is more fun house than museum.
At the Museum of Illusions opening soon, visitors can see many versions of themselves in a mirror-filled "infinity room," take a gravity-defying photo where visitors appear to be suspended from the ceiling, or check out other optical illusions like 3D hologram images.
The nearly 10,000-square-foot venue will open in early summer as the company's 61st global outpost and first in California. It joins an increasingly competitive field of experiential, non-shopping concepts expanding into retail hubs nationwide as some traditional stores shrink in response to shifting consumer habits.
The museum has the potential to provide a boost to downtown San Diego, where a struggling office market drawing fewer people has helped push the area's retail vacancy to 8.3%, well above the greater San Diego average of 4.4% and the U.S. average of 4.2%, according to CoStar data. The museum is opening in a nearly 140-year-old building that formerly housed an Urban Outfitters clothing store at 665 Fifth Ave. in a bustling area, the Gaslamp Quarter.
“With its historic theaters and rich iconic landmarks, the area stands as a cultural cornerstone, making it the perfect location for our expanding collection of immersive museums,” Museum of Illusions CEO Kim Schaefer said in a statement.
The museum's operators said the San Diego location would “play a role in the continued evolution of downtown.”
Non-shopping focus
With a number of traditional retail chains downsizing formats and closing stores during the past decade, property owners across the nation are now counting on non-shopping, experience-focused tenants to fill space and increase customer traffic.
The trend shows in a plethora of expanding, social “eatertainment” concepts across the country that combine on-site dining with pickleball courts, bowling lanes and golf simulators. With the pandemic in the rearview mirror, other operators are focused on interactive, kid-friendly “edutainment” venues that draw families and organizers of group events.
The Museum of Illusions is competing with concepts including the Museum of Ice Cream, providing paying customers with unlimited ice cream and the chance to slide into a vat of giant plastic sprinkles. There is also Sloomoo Institute, letting kids bask in a slime waterfall and concoct slime-based creations in an on-site “kitchen.”
Real estate services firm JLL noted a wide variety of tenants, including fitness chains and game centers, now backfilling vacated retail space nationwide, after store closings by chains such as Bed Bath & Beyond, Big Lots and Forever 21.
“Drugstores have been backfilled by the likes of dollar stores, bookstores and shoe stores,” the brokerage said in a first-quarter national retail report. “And Forever 21 space has been taken by discount apparel store Primark, as well as experiential tenant Elev8 Fun.”
Downtown boost
Museum of Illusions, started in Croatia, opened its first venue in Zagreb in 2015 and now has locations across 25 countries and four continents, showing visitors how the brain processes and can be misdirected by light and images. There are 22 now operating in the U.S., including venues in Chicago, Boston, Dallas, Philadelphia, Las Vegas and one in the Mall of America near Minneapolis.
The company has targeted about three openings per year, with debuts planned in Salt Lake City, New Orleans, Nashville, Detroit and Santa Monica, California. Many locations have locally themed features, like San Diego’s planned surf-oriented exhibits that include a wave-riding surfboarder with eyes that appear to follow visitors around the room.
In San Diego, the average downtown retail asking rent has declined 1.5% in the past year — compared with 1.3% growth for the San Diego region — and downtown retail absorption during the past 12 months was negative 28,000 square feet, meaning more space was vacated than filled, according to CoStar data.
Still, the historic, 16-block Gaslamp Quarter’s bars and restaurants have long benefited from the neighborhood’s location near the San Diego Convention Center and Petco Park, the home stadium of the San Diego Padres, which hosts baseball games, concerts and other events year-round.