Foothill Retail Corridor

A notice of default was recently filed for the venerable Star News building located at 525 E. Colorado Boulevard in Pasadena.

The 63,590 square foot building is 100% occupied with Le Cordon Bleu College of Culinary Arts, Technique Restaurant, 24 Hour Fitness, and a medical office use. The property is currently being marketed for sale at $19,500,000.

This month’s entry focuses on the closures and layoffs of just Los Angeles County, rather than including nearby areas such as Chino or neighboring Orange County cities, simply because the list is growing too large.

What I find interesting in this list is the number of medical jobs being eliminated (City of Hope 185 employees and Antelope Valley Hospital 45 employees). Supposedly medical jobs are one of the growth industries. Not surprising, aerospace is taking another hit, with Ball (120), JPL (33) and Northrup (75) eliminating a total of 228 positions. With budget cutbacks and aerospace moving out of California, I think this trend will continue.

I stopped by the Pasadena Border’s yesterday and joined the throngs looking for deals ranging from 10% to 30% off. I scanned the real estate section and didn’t see anything I wanted. I then went to the business section and found a book I have been wanting; $19.95 minus 20%, plus California’s usurious 9.75% sales tax would come to $17.52 according to my calculations.

I then went to pay for my item, only to be met with a line that looked to be about a half hour long. While standing there, not moving, I pulled out my slick new smart phone and went to Amazon and found that I could order the same book for $13.57 plus $3.99 shipping, for a total of $17.56, only 5 cents more than Border’s sale price. Hmm, maybe that is why Border’s is closing?

Here is a list of the Los Angeles County Borders stores that are going to be closing by the end of April 2011.

List of Los Angeles County Borders Closings

Construction continues on the rebuilt Vons on East Colorado Boulevard, however, rain delays have pushed back the estimated completion of the new Vons store and pad buildings to late spring or early summer.

The new store will be approximately 61,000 square feet. All of the buildings on the site were completely demolished in order to make room for the new building and two pad buildings. The pad building on the northwest corner of Sierra Madre Boulevard and Colorado Boulevard will be approximately 6,300 square feet and is projected to be home to a Starbucks. The other pad building will be on the southwest corner of the property and will have 6,650 square feet of retail plus an additional 2,600 square feet of restaurant space.

The Vons Pharmacy is temporarily located across the street at 2310 E Colorado Boulevard until the new store opens.

Village Roadshow Gold Class Cinemas has announced the layoff of 53 employees effective November 30, 2010. The upscale theatre boasts very comfortable reclining seats, food service at your seat, and blankets and pillows upon request.

The theatre is located in the One Colorado Boulevard retail complex, with an address of 42 Miller Alley.

The Pasadena Star News sent the first Twitter “Tweet,” over 60 years ago!

Long story, but someone recently gave me a page from the October 14, 1947 Pasadena Star News which contained a photo story of the Star News using the Goodyear Blimp to flash aerial headlines.

The caption on the photo reads: FLASHES AERIAL HEADLINES – This is the Goodyear blimp which last night was seen by thousands of Pasadena area residents as it flashed Star News headlines in the sky from 6 to 9 o’clock. The blimp flashes news by red neon letters on its sides, visible up to a half-mile and will soar over the city nightly through Friday.

So, here’s to the Pasadena Star News being way out in front of everyone, over 60 years ago!

Construction is nearly complete on the new Walgreens at the southeast corner of Sierra Madre Boulevard and Colorado Boulevard, also known as the “elbow” of the Rose Parade due to the Parade’s northeast turn at this intersection.

Walgreens has long been the gold standard for triple net (“NNN”) real estate investments due to their tremendous cash position and lack of outstanding debt. This combination has made the typical Walgreen’s real estate investment highly sought after with some of the lowest cap rates in the NNN investment realm, despite the lease being flat for 75 years.

However, even Walgreens has not escaped the credit crunch. In the last couple of years, I have seen the cap rates for Walgreens rise over 100 basis points, going from a 6.25% to 7.5% cap rate. On the other end of the drug store spectrum is Rite Aid, a company heavily in debt due to their buyout of the Brooks and Eckhard stores in June 2007. A Rite Aid store can probably be bought for upwards of a 9.0% cap rate, depending on location.

The retail drug store chains have seen a lot of changes in the last few years with WalMart and Target expanding into the market. I expect Walgreens and CVS to survive, but I have my doubts about Rite Aid. Which makes me wonder what will happen to the old Thrifty ice cream?

Construction is nearly complete on the new Walgreens at the southeast corner of Sierra Madre Boulevard and Colorado Boulevard, also known as the “elbow” of the Rose Parade due to the Parade’s northeast turn at this intersection.

Walgreens has long been the gold standard for triple net (“NNN”) real estate investments due to their tremendous cash position and lack of outstanding debt. This combination has made the typical Walgreen’s real estate investment highly sought after with some of the lowest cap rates in the NNN investment realm, despite the lease being flat for 75 years.

However, even Walgreens has not escaped the credit crunch. In the last couple of years, I have seen the cap rates for Walgreens rise over 100 basis points, going from a 6.25% to 7.5% cap rate. On the other end of the drug store spectrum is Rite Aid, a company heavily in debt due to their buyout of the Brooks and Eckhard stores in June 2007. A Rite Aid store can probably be bought for upwards of a 9.0% cap rate, depending on location.

The retail drug store chains have seen a lot of changes in the last few years with WalMart and Target expanding into the market. I expect Walgreens and CVS to survive, but I have my doubts about Rite Aid. Which makes me wonder what will happen to the old Thrifty ice cream?

In my previous post I listed Los Angeles regional closures and layoffs. While that post indicates a Los Angeles region that is still suffering major job losses, a closer look at the cities that comprise the Foothill Retail Corridor (“FRC”) presents a healthier job situation overall, but with a wide disparity within the FRC communities.

Comparatively, the FRC has a lower unemployment rate (9.3%) than Los Angeles County (13.4%) and California (12.8%), but is closer to the national average of 9.7%. However, the cities that comprise the FRC range from a very low 4.1% in Sierra Madre to a high of 14.5% in Azusa.

Please note that these numbers are from the government and they may not add due to rounding. And, I have no idea how the city of Bradbury can have an employment base of 500 with all 500 employed and still achieve an unemployment rate of 8.1%! As they say, close enough for government work.

Monthly Labor Force Data - July 2010

CDP is “Census Designated Place” – a recognized community that was unincorporated at the time of the 2000 Census.

Source: California Economic Development Department

Online dating service, eHarmony, will be leaving their headquarters at 888 E. Walnut by the end of 2010. They will be moving to Santa Monica in order to be closer to the homes of key executives. I guess they found a better match!