On the eve of its reopening, Palisades Village shopping center no longer resembles the commercial island amid destruction it became in the January 2025 fire. Workers are installing light posts, finishing walkways and preparing storefronts that have sat dark for more than a year and a half.
When the Caruso-owned shopping and dining center reopens Saturday following a $100 million restoration, more than 40 boutiques, restaurants and other businesses will return to the heart of the Pacific Palisades business area.
About 20 months after the Palisades fire destroyed nearly 5,500 homes and much of the neighborhood's commercial core, residents and builders say the reopening is the clearest sign yet that recovery is gaining momentum. Even so, only a fraction of homes under construction have been completed, and much of the commercial district remains damaged or vacant.
Rick Caruso, whose namesake firm developed Palisades Village and The Grove, told CNBC the opening is a sign of "resilience" for the neighborhood.
"You can work hard, buckle down and great things can happen," Caruso said.
Caruso's chief financial and revenue officer, Jackie Levy, told CoStar News that the commercial progress "signals that they’re not rebuilding alone. Reopening the Village is one tangible sign that investment in this community hasn’t stopped and that people continue to believe deeply in the future of the Palisades."
JLL Managing Director Mike McRoskey, who has lived in the Palisades for more than three decades, said conversations among neighbors of late have centered on who managed to secure reservations at the Village's restaurants.
"This just gives people tremendous hope," McRoskey said.
Reviving the village
Palisades Village largely escaped structural damage in the fire, with Caruso pointing to the center's fire-resistant design and privately organized firefighting operation as factors that helped protect it and portions of the surrounding commercial district.
Even so, Caruso said his team stripped the center's apartments, restaurants and retail spaces to the studs to address extensive smoke damage and rebuilt the interiors from scratch.
“We said from the beginning that we were going to reopen this thing better than it was before," Caruso told CNBC.
Nearly all of the property's pre-fire tenants are returning. Additions include Nancy Silverton's Italian steakhouse Spacca Tutto and Alphabet Bar & Grill in the former Hank's space.
Returning tenants include restaurants Porta Via, Angelini Ristorante & Bar and Blue Ribbon Sushi as well as the fashion brand Paige, while Loomey's Toys and clothing stores Elyse Walker and Mother are relocating to the Village after losing their former Palisades locations in the fire.
Caruso is also trying to make the Village function as more than just a collection of stores. A farmers market returns Aug. 19 alongside recurring community events intended to restore the neighborhood connections lost after residents scattered across Southern California.
Eddie Lorin, whose company, Monument Homebuilders, is working on multiple rebuilding projects in the Palisades, said the Village reopening is a sign the community is moving beyond disaster response and into recovery.
"This weekend is a huge, monumental moment for the Palisades," Lorin, who expects as many as 7,000 people to show up for the grand reopening ceremony Aug. 15, told CoStar News.
Recovery remains uneven
Across 4,110 total parcels, owners have submitted plans for 1,715 primary structures, permits have been issued for 1,177, and construction has started on 986 buildings, predominately residential, according to the latest Pali Rebuild Map data. Only 34 homes are listed as completed.
Lorin estimates roughly two-thirds of owners still intend to rebuild, while about one-third of fire lots have changed hands.
Caruso said the wait for insurance payouts remains the biggest obstacle slowing recovery for homeowners and businesses across Pacific Palisades. Yet builders say activity is becoming increasingly visible across the neighborhood.
In some areas, surviving homes and active construction projects sit side by side. Elsewhere, stretches of former residential blocks remain largely cleared. Builders say more homeowners are moving beyond planning and design work into active construction as insurance claims and financing questions gradually get resolved.
Among those McRoskey knows in the Palisades, he estimates more than half intend to rebuild and remain in the Palisades, though insurance shortfalls, mortgages and lengthy approval processes continue pushing some residents to sell or relocate.
"It's probably going to be seven years before the community looks like it used to look," he said.
Businesses await rooftops
Commercial recovery outside Palisades Village is moving even more slowly. Blocks of the old commercial district remain vacant or scarred, including portions of the historic Business Block near Sunset Boulevard and Swarthmore Avenue, where the fire destroyed businesses such as Starbucks and popular restaurant Cosa Nostra Trattoria.
Avison Young Principal Mitchell Stokes, who lives just outside Pacific Palisades, was evacuated during the fire and handles leasing at the Ralphs-anchored shopping center on Sunset Boulevard. He said the pace of recovery reflects the neighborhood's demographics.
“The businesses were there to serve the people and the people aren't there," Stokes told CoStar News. "As slow as the residential is, which is slow, the commercial is even slower.”
Signs of progress are emerging. Bank of America signed a long-term lease for the former Pharmaca space at 15150 W. Sunset Blvd.
A former Shell gas station on Sunset Boulevard has been converted into an Ace Building Materials store serving rebuilding efforts, while entrepreneur Michael Edlen has opened Pali Trading Post, a general store stocked with Palisades-themed merchandise and products from local vendors.
Other businesses beginning to return or expand include Gerry Blanck’s Martial Arts Center, Café Vida and the forthcoming Palisades General Store.
Still, major neighborhood anchors including the Ralphs and Gelson’s grocery stores have yet to announce firm reopening timelines.
The absence of supermarkets remains one of the biggest obstacles to bringing families home, forcing many residents to leave the neighborhood for groceries and underscoring how rebuilding houses does not automatically restore a functioning community.
Development plays
Only six notable commercial properties have traded since the fire, all burned sites near the town center, according to CoStar data. In July, an investor paid $7.6 million for a burned Antioch Street retail and office strip that housed clothier Elyse Walker and several other businesses, reflecting land values of roughly $16 million per acre.
Landowners may still be betting on the Palisades, but rebuilding remains costly and uncertain.
Commercial landlords must contend with construction costs, permitting, insurance issues, tenant losses and uncertainty about how quickly residents will return.
Stokes said the Village's reopening is "critical" to the broader recovery effort.
"If not for the Palisades Village, who knows what would be there," he said.
Whether that momentum extends beyond the Village remains an open question. A successful reopening could encourage other displaced merchants to return, give landlords evidence of consumer demand and reassure homeowners that they won't be returning to an empty neighborhood.
"When you see this place teeming with people and eating and dining and shopping, going to the movies, I think it's going to be transformational," Lorin said.
McRoskey wasn't able to snag a reservation at Nancy Silverton's new steakhouse for opening weekend, but he still plans to attend the reopening and see the center bustling again.
"You don't feel like you're coming back to something old," he said. "You're coming back to something that feels new and fresh."