It was high time for a change at the La Quinta Village retail center, located at the northwest corner of the intersection of Washington Street and Calle Tampico directly north of La Quinta City Hall. Since its anchor store, Ralphs, closed in 2013 the mall had been stagnating with a vacancy rate of 80%.
The change in La Quinta Village’s fortune is due in large part to the marketing efforts of Wilson Meade Commercial Real Estate, which took over promotion and leasing of space in the center in mid-2020. The first important breakthrough came approximately one year ago with the signing of Grocery Outlet to lease roughly half of the former Ralphs store or roughly 20,000 square feet.
Grocery Outlet has been in business since 1946, and now has 400 stores within six states. Carrying well-known brands reasonably priced for reasons such as packaging changes, surplus inventory or product overruns, Grocery Outlet also features fresh meat and produce as well as natural and organic items. There are four Grocery Outlet stores open in Greater Palm Springs, including stores in Desert Hot Springs, Palm Springs, Cathedral City and Bermuda Dunes. The La Quinta store is slated to open in early November.
According to Kate Rust, Vice President of Wilson Meade, “We started marketing the center in July of 2020, which was right in the middle of the worst period of COVID’s detrimental economic impacts. The owners were hesitant at first, but eventually they felt like it wouldn’t hurt to see what could happen. And we did get a very good response.”
Having a Grocery Outlet in La Quinta Village seems like rightsizing. “The area needs a grocery store,” said Cameron Rawlings, a Wilson Meade broker (and the company’s 2021 Rookie of the Year), but I don’t know if it needs 40,000 square feet of a grocery store. That’s why it didn’t pencil out for Ralphs to stay.”
According to Rust, “We did six additional leases after we could announce that Grocery Outlet had signed. It’s very difficult to get people to commit to a center where there is no anchor, so this was a big deal to help build momentum.”
The second breakthrough was a change of placement of the Starbucks that was still operating in the center. “Starbucks had a small spot without a drive-thru,” said Rust. “And unless they’re in a place like downtown Palm Springs, they’re pretty much strictly drive-thru stores these days. So, it just made sense for the center and Starbucks to build a new space, and I think having that construction going on during the pandemic helped us with visibility and confidence among prospective tenants that good things were happening at La Quinta Village.”
Rawlings agreed: “Surprisingly, a lot of the restaurant spaces got attention during the pandemic. Many of the restaurants had a big footprint, but if they had a good takeout, they were doing better numbers than before the pandemic. So, we had multiple offers on all the restaurant spaces and signed the three we had available. We’ve got a lot of interest in the former Starbucks space too. It has a grease trap, not fully built out, but a grease trap is an up to $60,000 investment, so that space has seen a lot of action.”
Rawlings, who started at Wilson Meade three years ago, is the lead broker on La Quinta Village and a driving force in getting the property back on track. “He is considered the king of getting on the phone and creating relationships,” laughed Rust. “I think every broker in the Valley has probably called these owners to get this listing.” Speaking to Rawlings, Rust said, “Cameron, I think you called them 30 times.”
Rawlings admitted to a lot of calls. “There’s one parcel in that center that is owned separately by one of our clients, and he wanted to buy the rest of the center. So, I was just trying to get in touch with them to see if they would sell the center. When I finally got ahold of them, they said that they didn’t want to sell it, but instead they wanted local representation for leasing.”
“One of the big challenges was getting them to lower their expectations. They were asking $250 a square foot for a nearly empty retail center with no anchor. The biggest struggle was getting them to realize that they simply needed to get some new tenants signed before asking for those premium rents. Now that people are shopping there and Grocery Outlet is opening soon, I think the rest of the spots will fill up a lot faster, especially the larger spaces.”
Speaking of larger spaces, Rust said, “We’re targeting the 4,800-square-foot, standalone building on the corner of Washington and Calle Tampico. We have a few options: take it down or find a restaurant that is looking for that large of a space. We’ve also been approached by people that want to create an executive suite use for it.”
Meanwhile, La Quinta Village is populating with small businesses, like The Peddler, which is currently on Highway 111; and Los Arcos, currently in Cathedral City Town Center. “The owners felt it was a good opportunity to be here in the La Quinta area,” Rust noted. “And next to them, we’re adding Thai Basil, which should be open in November. This is its second location; the first one in Palm Desert is very popular.”
“And then Leroy’s Detroit Style Pizza, which is another local business,” added Rust. “He’s a startup that’s amazing and everything is made from scratch.”
So, from a flurry of cold calls, a languishing shopping mall has risen from the ashes. “The owners love the idea of having local businesses taking space,” said Rust. “They’re really happy with the businesses that we’ve signed to the center.”