Scores of retailers eye new opportunities in L.A. County; improving economy, low rents spur leasing activity.

Nearly 40 retailers are currently looking for space in L.A. County, a reflection of low rents, low interest rates, easier access to financing and an increasingly business-friendly environment, brokers say.

The retailers, most of which are searching for more than one space, range in size from major national chains to small chains with only a few stores. They are also a diverse group, and include retailers that sell home furnishings and housewares, consumer electronics, apparel, books and music, along with restaurants.

All these incentives are coming as retail sales in L.A. County are picking up. They surged 6.5 percent during June compared to June 1993, according to statistics published by the U.S. Department of Commerce.

"There is a great window in this community right now," said Steve Soboroff, managing partner of Soboroff Partners, a Santa Monica-based retail brokerage firm.

Retailers have watched rents fall for several years. Now they perceive that the Southland recession has either ended or is close to ending, and believe this is the time to lock in low lease rates before they rise again, said Dick Carter, vice president with Century City-based Blatteis Realty Co.

"People feel that the rents have stabilized and they won't be able to make any better deal in the future than they can make today," added Mark McGaughey, first vice president of downtown L.A.-based CB Commercial Real Estate Group.

For example, a property in Culver City, where Sepulveda and Jefferson boulevards meet Slauson Avenue, that was selling for $70 a square foot several years ago landed no buyers, Soboroff said. Eventually, the price fell to $25.50 per square foot, and pieces of the property were recently bought by Illinois-based Circuit City, Florida-based Office Depot Inc. and Michigan-based General Motors Corp. (for a car dealership), he said.

Furthermore, interest rates have fallen enough in recent years to offer financing that encourages retailers to expand, Soboroff added. He cited Office Depot and San Jose-based Orchard Supply Hardware as two examples.

Both retailers were paying double-digit interest rates on their debt in years past. But now they have both secured loans from institutional investors at between 5.5 and 8.5 percent interest rates and are eager to expand, particularly in Southern California, Soboroff said.

In addition, Los Angeles Mayor Richard Riordan is doing a good job of creating the perception that the city is more business-friendly than it was before, Soboroff said. And retailers "are picking up on Riordan's vibes," he said.

Although the permitting process in the City of L.A. is still cumbersome, city officials are more helpful to permit-seekers than they were in the past, Soboroff explained.

Further fueling retailers' enthusiasm for the region is a pickup this year in consumer spending, said Liz Evans, a retail broker with Encino-based Zugsmith-Thind Inc.

Retail sales in L.A. County have increased every month this year compared with similar periods during 1993, according to Department of Commerce statistics.

Many retailers searching for space are headquartered elsewhere but want to expand into L.A. County.

One of the best-known retailers is Best Buy Co. a Minneapolis-based consumer electronics retailer which plans to open seven stores in Southern California by November, including five in L.A. County, according to published reports.

Other retailers are headquartered locally but looking to expand.

Santa Monica-based Louise's Trattoria is seeking local expansion because its restaurant chain is successful, but also low rents in L.A. County are an incentive, said President Bill Chait. "There are reasonable deals out there," he said.

But brokers say that, while large spaces are available, there is a dearth of space for smaller retailers.

"I've got tenants right now looking for (sites), and I'm struggling like crazy to find locations for them," said Jim Dionne, a retail broker in the Sherman Oaks office of CB Commercial who represents many small tenants.

Shopping centers used to be built for one or two anchor tenants and several smaller shops, Dionne said. But now centers are being built to cater primarily to large, or big box," tenants, he said.

Thus Soboroff, who deals with larger tenants, said he is having little trouble finding space for retailers he represents. "The real estate is here," he said.

Landlords are often willing to convert several smaller spaces in their centers into one large one, he explained.

RELATED ARTICLE: The retailers are coming

(Retailers reported to be looking for space in L.A. Country)

Books Barnes & Noble Borders Inc. Super Crown

Clothes Old Navy Clothing Co. Speedo Urban Outfitters

Electronics Adray's Best Buy Circuit City

Home furnishings and housewares The Container Store Home Depot Home Express Homelife

Music Blockbuster Music Tower Records Virgin Megastore

Restaurants Applebee's Au Bon Pain Boston Chicken California Roasters Country Harvest Buffet Diedrich Coffee Gaucho Grill Hometown Buffet The Juice Club Kenny Rogers Roasters Koo Koo Roo Louise's Trattoria Monterey Pasta Old Country Buffet 

Other L.A. Gym Equipment Mrs. Gooch's Office Depot Orchard Supply Hardware Pestmart Standard Brands Paint Co. Walgreen's Wal-Mart Stores Inc.