Like most, I shudder when I hear the words “economic recession,” yet every newspaper around the country is talking about it. When will it happen? Has it already started? More important to us, will Napa County be affected?
Napa County’s resilience to economic downturn has proven itself in the past. Despite talk of commercial industry bottoming out, Napa County’s wave of new office, industrial, hotel and retail space is proof of its tough skin and resiliency. As I’ve touched on in past NorthBay biz Commercial Real Estate Reports, Napa County’s loyal residents, returning tourists, and (of course) fabulous wine, keep our economy afloat. As you’ll see, Napa County’s retail market is in the middle of a growth spurt, trying to keep up with the tourism demand and an expanding, increasingly affluent residential market.
American Canyon
CNN Money recently named American Canyon Number 11 on a list of 100 Best Places to Live and Own Your Business. This great award is supported by the influx of housing developments and retail complexes that are popping up throughout the city. The City of American Canyon is currently working with American Canyon I, LLC, to develop a 100-acre town center. Of the 100 acres, 44 will be used to create a mixed-use village containing 40,000 square feet of retail, restaurant and office space. The design idea is to create a small town feel by allowing professional storefront offices and small boutique shops. No big-box retail is anticipated.
Farther up the road, the Shops at American Canyon are scheduled for availability in Spring 2009. Roughly 10,000 square feet will be available for lease, ranging from $3 to $3.25 per square foot (NNN). Walgreens has secured a spot as the project’s anchor tenant.
Also in American Canyon, Phase II of the Napa Junction project is nearly fully leased. Only three retail spaces remain available, totaling 4,610 square feet. The asking leases for these three spaces are $3.25 per square foot (NNN). This 56-acre mixed-use development features 214,000 square feet total retail in Phases I and II—most of which filled within one year. Tenants include Wal-Mart, Jamba Juice, Bank of America, Starbucks and Sonic. An additional 131,000 square feet of retail space will be included in Phase III, which is anticipated for completion in the first half of 2009.
Other Napa areas
In South Napa, Napa Redevelopment (former Napa Pipe) is battling its way through the entitlement process. If approved, the 152-acre project will house 3,200 dwellings, 80 acres of parks and open space, a 150-unit condo hotel, 500,000 square feet of business/light industrial space and 40,000 square feet of neighborhood retail.
In Napa proper, Riverpark Center, anchored by Rite Aid and Hancock Fabric, is leasing approximately 13,500 square feet of retail space. Current asking leases are between $2 and $2.50 per square foot (NNN). Next to Riverpark Center, Tesco’s Fresh & Easy will take over the former gymnasium as a 10,000-square-foot market.
With improvements nearly completed for its anchor tenant, AUL Corp, and the swanky new Pizza Azzuro as its corner spotlight, Main Street West is settling in its downtown Napa location with first floor street retail space available for $3.15 per square foot.
Downtown Napa’s spotlight project, The Riverfront, is well underway with steel going vertical. This $72 million project will feature nearly an acre of retail and restaurant space with premium rents in the vicinity of $5 per square foot. Emporio Rulli Gran Caffé and Ristorante has signed a lease for one of the three planned restaurant spaces.
CDI Development has nearly half of its downtown Napa Square project leased. Of the 68,344-square-foot building, 25,788 square feet of retail space is available at $3.25 per square foot. U.S. Advisors, MK2 Engineering, Capital Retirement Strategies and CDI have already secured leases on the second and third floors.
With the completion of the Annex building, Oxbow Public Market is nearly fully occupied. Kanaloa Seafood and Ritual Coffee Roasters opened mid-May, with the Hog Island Oyster Company to follow in September. Taylor’s Automatic Refresher and Model Bakery are already packing them in. And an exciting new retailing concept, farmstands, are set to open around the building’s perimeter, creating an “everyday” farmer’s market.
Just down the street from Oxbow Public Market is the planned location of the Ritz Carlton Hotel. This 11-acre, five-star hotel will feature 351 rooms, roughly 21,000 square feet of meeting space, storefronts along First Street and underground parking. The estimated cost is nearly $200 million.
The five-story AVIA Napa hotel is now under construction. Formerly known as The Inn at Town Center, this project will feature 141 guest rooms, 1,900 square feet of meeting space, 8,000 square feet of restaurant space, and 4,000 square feet of retail space. AVIA is seeking high-end restaurants and boutique shops to fill these spaces, asking $3.25 to $4 per square foot (NNN). The project is anticipated to be complete mid 2009.
Many of these projects were conceived and approved in better economic times, but their commitment to Napa remains. Paradoxically, the synergy of all this activity is bringing more and more customers to our Valley. Our country broke into economic regions long ago—and, more recently, into subregions. Recession? Elsewhere perhaps, but not here.
