Location used to be the biggest factor in whether real estate was easily sold or leased. Not so much these days.
Many landlords who are struggling harder than ever because of the recession to keep spaces rented in neighborhood retail centers are looking across the street with envy at neighbors who seem to have no difficulty finding and keeping tenants.
In northwest Fresno, a steady stream of businesses has moved into Opus I over the last year and a half. But across the street, Bullard Plaza has struggled to attract an anchor tenant since Rite Aid left in 2009.
In southeast Fresno, the owner of Mayfair Shopping Center has only one vacancy. But Sunnyside Marketplace, a newer retail center four miles down the road, still sits half-empty.
Location is still important, said Mayfair's owner Ted Caldwell. But to survive a recession, shopping centers need good management, good fundamentals and "a dose of luck," he said.
Overdevelopment during the boom years and businesses that closed during the recession have created more retail space than there are potential tenants.
That's bad news for plaza owners who have a mortgage to pay, but good news for tenants who now have their pick of locations and leverage to negotiate their rent.
The retail vacancy rate in Fresno remains at about 11%, according to a second quarter report conducted by CB Richard Ellis, a Fresno commercial real estate company. In the fourth quarter of 2007, the vacancy rate was only 5%.
Clovis has the highest vacancy rate at 14.4%, followed by southeast Fresno with 12.5%, the report says. Northeast Fresno has the lowest vacancy rate at 8.5%.
Some retail centers are hurting because of the economy, some have been vacant for years because no one wants to go in them, and others always seem to do well, said Skip Rolf, commercial broker with Sperry Van Ness in Clovis.
Successful centers have visibility and the right combination of tenants to create synergy, Rolf said.
A good mix
Darlene Arnold saved about $500 a month on rent by moving and downsizing her floral shop from northeast Fresno to Opus I at Palm and Bullard avenues.
Wild Rose Floral & Gifts spent 10 years at Cedar and Nees avenues. When her lease came up for renewal earlier this year, Arnold hoped to negotiate a lower monthly rent. The landlord wouldn't budge.
The economy had taken a toll on the business and Arnold knew it was time for a change.
The unique layout of Opus I -- a shady corner with several buildings and a courtyard -- creates a close-knit community of retail shops and restaurants that Arnold liked. She compares it to Fig Garden in its early days.
"There's good exposure, and Palm Avenue is rocking," Arnold said.
The locally owned shopping center has been successful for years because of its layout and diverse mix of businesses, commercial retail brokers say.
A children's bookstore, a tea shop, a dog grooming business, a handbag boutique and a couple hair salons are located in the center, which is fully leased.
Owner Tanner Tingey said he is lucky to have tenants with businesses that complement each other. That's key to keeping a center full, along with good property maintenance, he said.
"You also have to be realistic with your lease terms," said Tingey, who has owned the center with other family members for about six years. "I like to think that we're pretty competitive on our rental rates."
It's a different story at Bullard Plaza across the street, which lost Rite Aid and Blockbuster two years ago.
Drug stores have abandoned the traditional shopping center for free-standing buildings with a drive-through, said Steve Rontell, commercial retail broker with Colliers Tingey in Fresno. Colliers is handling leasing for the old Rite Aid space.
"It's a good shopping center which is in a transition," Rontell said. "I think a lot of properties go through a transition and hopefully that one will be for the better."
Change could be coming soon. A Ride & Shine car wash is under construction in front of the plaza. Hussain Zaidi, owner of Lahori Tikka restaurant, hopes the car wash will attract more customers to his Pakistani and Indian lunch buffet.
The "for lease" signs on the building give passersby the illusion that the plaza is dead, said Zaidi, who has owned the restaurant for five years. He considered moving but decided to stick it out.
"I will never surrender and I will just keep focusing on my food," Zaidi said.
Caldwell has been successful keeping small, local businesses filling up Mayfair Plaza in southeast Fresno.
He attributes the retail center's success to its location on McKinley Avenue and First Street, which is down the street from Highway 41 and on a direct route to Fresno Yosemite International Airport.
The types of businesses also maintain the center's vibrancy because they have developed a great following from nearby residents, Caldwell said.
Mayfair has a mix of Vietnamese Pho restaurants, a 99-cent store, a jewelry store, a seafood shop and the Train Depot, a restaurant.
"It's important to have activity, to have synergism and get people in and people out," said Caldwell, who lives in the Sacramento area but has owned the plaza since 1980.
The center was once anchored by a Save Mart grocery store, but Caldwell sold the building in 2000 when he failed to lease it out. He used some of the money from the sale to upgrade the property with new asphalt in the parking lot, new heating and air conditioning units, landscaping, painting and roof improvements.
He built and opened a self-storage business behind the shopping center in March, expanding at a time when most people are holding back on renovations or new ventures.
Train Depot owner Pat Escovedo has never seen the center in better shape. Moving to a newer shopping center sounds nice, but the restaurant's current location can't be beat, she said.
"If something's not broken, don't fix it," Escovedo said.
Sometimes newer doesn't translate to lots of tenants.
The Sunnyside Marketplace was built in 2006 to serve new residents in the neighborhoods at Fowler and East Kings Canyon Road. A George Brown Sports Club anchors the shopping center. Other tenants include a State Farm insurance store, a salon, a pizza restaurant and a bicycle shop, but most of the center is still empty.
Newer retail centers, built within the last five years, are still not filling up because of the weak economy, said Nick Rendino, a retail broker with CB Richard Ellis.
What's happening now is that some businesses are moving to more desirable locations -- not necessarily in newer centers -- because lease rates are low, Rendino said.
"This is the first time in a long time where the tenant has the upper hand over the landlord," he said.