Is TIC feeling any pain?

NEW -> Contingent Buyer Assistance Program
[quote author="no_vaseline" date=1215529439]I think I need a beer.</blockquote>


Don't forget to share. It sounds like others may need one, er eight too.
 
[quote author="PadreBrian" date=1215512556]I don't know, but that space is huge. It will be a high-end restaurant/bar. The yard-house is now always packed.</blockquote>


Not any place else to go in the Spectrum. Just Javiars, and Champs. Or you can give yourself a

real headache and hang at D&B;`s. So much for Irvine night spots. I wonder who will be the next TIC casualty ?



Seriously. Who is going to take that huge area that was the Fox Sports Grill and pay that

insane rent in this current economy ? I am willing to bet it will be empty come Xmas.
 
I failed to mention the two brand new office towers are completely empty save for half of one floor. Most of those restaurants need the high-end lunch/dinner crowd which the two towers promised to do. Then went the mortgage industry. :snake:
 
[quote author="bltserv" date=1215556291][quote author="PadreBrian" date=1215512556]I don't know, but that space is huge. It will be a high-end restaurant/bar. The yard-house is now always packed.</blockquote>


Not any place else to go in the Spectrum. Just Javiars, and Champs. Or you can give yourself a

real headache and hang at D&B;`s. So much for Irvine night spots. I wonder who will be the next TIC casualty ?



Seriously. Who is going to take that huge area that was the Fox Sports Grill and pay that

insane rent in this current economy ? I am willing to bet it will be empty come Xmas.</blockquote>


Never went to the Fox Sports Grill and haven?t been to Champs in ages.

I think the Yard House killed it for both of those establishments.

During the Lakers run it seems everyone was watching the games at the Yard House.



I don?t get why they're putting in a Ruby?s next to the theaters.

There?s a Johnny Rockets over there already.

Aren?t these two concepts essentially the same?
 
[quote author="tenmagnet" date=1215560634]I don?t get why they're putting in a Ruby?s next to the theaters.

There?s a Johnny Rockets over there already.

Aren?t these two concepts essentially the same?</blockquote>


Yes, however if you pay attention to the Spectrum on a Saturday night, you'll notice:



1) Lots of kids

2) lots of families

3) everybody is middle class.



The places doing the real booming business are the $5/serving snack places like Pinkberry, ColdStone, Coffeebean, Wetzels, the restaurants are busy but the higher the prices the less so compared to a year ago.



Sadly, the Spectrum is turning into another Block at Orange.
 
Isn't that what Irvine is? About families? maybe TIC and most of Irvine wanted it that way...



[quote author="No_Such_Reality" date=1215564254]



Yes, however if you pay attention to the Spectrum on a Saturday night, you'll notice:



1) Lots of kids

2) lots of families

3) everybody is middle class.



The places doing the real booming business are the $5/serving snack places like Pinkberry, ColdStone, Coffeebean, Wetzels, the restaurants are busy but the higher the prices the less so compared to a year ago.



Sadly, the Spectrum is turning into another Block at Orange.</blockquote>
 
I agree. I was at the spectrum Saturday night and liked having people of all ages around me. Lots of dogs around too. I'm sure Irvine doesn't mind it being very family oriented





Now the parking structure on the other hand.............not sure how those sensor things work but I definetly do no think there were 80 spots on the first level or 170 on the 4th. Ended up parking over by Target.
 
[quote author="rickhunter" date=1215565318]Isn't that what Irvine is? About families? maybe TIC and most of Irvine wanted it that way...</blockquote>


Yes and no. The spectrum is a very large commercial space. In order for something of that size to be successful it needs to be diverse. When TIC builds an apartment building (more non-families living there than families) and a bunch of office space (after work dinner and/or drinks are non-family activities), then the shopping/eating/drinking center needs to cater to more than just the happy go lucky puppy dogs and ice cream families of Irvine in order to be truly successful. Look at how Javiers and the Yardhouse are doing, and look at the type of clientele they are catering to. Their focus is not on families, but they welcome the added non-targeted business of the families. If TIC decides that all they want to cater to at the spectrum are families, then it will die a slow and miserable death just like triangle square.



Hopefully acpme can chime in here to add more to the life and death of a shopping/eating/drinking center.



Here are the vacancy rates for OC's retail space for Q2...



http://img702.mytextgraphics.com/photolava/2008/07/08/cbreretailvacq208-4b44lvbbh.jpeg



Here are the vacancy rates for OC's office space for Q2...



http://img802.mytextgraphics.com/photolava/2008/07/08/cbreofficeq208-4b44mouda.jpeg



Note how in South County (where the spectrum is included) had an increase in vacancies due to a building in the spectrum being <strong>unoccupied</strong>.
 
[quote author="graphrix" date=1215563992]<a href="http://calculatedrisk.blogspot.com/2008/07/strip-mall-vacancy-rate-increases.html">Calculated Risk has a post on strip mall vacancies</a>. After seeing the chart below, it makes me thankful that I read acpme's posts. Also, I have the CBRE Q2 reports for OC's commercial RE.



http://bp3.blogger.com/_pMscxxELHEg/SHN34ongzfI/AAAAAAAACPk/l9jRSfRWwqM/s1600/StripMallVacancy.jpg</blockquote>


Nice link.

Looks like those numbers are nationally.

The Kool Aid is still flowing strong in the commercial sector.

Cap rates in OC and LA are still ridiculously low right now.

The vacancy number for retail is still under 5%

The numbers for office are frightening, yikes!
 
[quote author="rickhunter" date=1215565318]Isn't that what Irvine is? About families? maybe TIC and most of Irvine wanted it that way...

</blockquote>


Yes, however, there is a delicate balance between families and kids. By kids, I meant roving groups of teenagers. If you've been to the Block, you know what I mean, prior to the curfew, it's over-run and literally drives other patrons away.



Similar to another pointing out, a viable retail/entertainment center needs multiple marketing groups. I doubt the pinkberries of the world will replace Fox Sports and the supposed $100,000+ a month rent.



As for families, frankly, I love the casual walking nature and ability to bring dogs and younger children. It provides another 3rd place for the groups to socialize but frankly isn't really set up for it. Seating is highly limited and the small food court type stores have individual seating areas insteasd of community seating areas.
 
[quote author="freedomCM" date=1214879049]I haven't been to the speculum in 8 years, i bet. Hate the vibe, hate the walk through the parking lots.



But I would make an exception for the French Laundry, I'm certain!</blockquote>


You?re in luck!

The same guy that owns French Laundry opened Bouchon at the Venetian in Vegas.

Met some people at Tao (the club) this past weekend who ate there.

They said the menu/food is the same as the one in Napa.
 
[quote author="tenmagnet" date=1215560634]

I don?t get why they're putting in a Ruby?s next to the theaters.

There?s a Johnny Rockets over there already.

Aren?t these two concepts essentially the same?</blockquote>


tea station closed and jrockets is moving to that spot. spectrum is going a game of musical chairs.



<blockquote>The same guy that owns French Laundry opened Bouchon at the Venetian in Vegas.

They said the menu/food is the same as the one in Napa.</blockquote>


there's a bouchon in napa and vegas. both are standard, but very good, french bistro fare. french laundry is thomas keller's flagship and for the most part the menu is prix fixe. you probably meant that but the wording was somewhat confusing.
 
[quote author="tenmagnet" date=1215569643][quote author="freedomCM" date=1214879049]I haven't been to the speculum in 8 years, i bet. Hate the vibe, hate the walk through the parking lots.



But I would make an exception for the French Laundry, I'm certain!</blockquote>


You?re in luck!

The same guy that owns French Laundry opened Bouchon at the Venetian in Vegas.

Met some people at Tao (the club) this past weekend who ate there.

They said the menu/food is the same as the one in Napa.</blockquote>


Been to both. Yes they are the same style and spirit.

But the French Laundry is Thomas Keller`s flagship and shows so much more effort

and detail in the preperation and ingrediants. Bouchon is just another overpriced

Vegas dinner experience. I was not that impressed at all when we tried it.

You can get a reservation without much effort either.

You wont get a French Laundry reservation, even with a Centurion Concierge helping

you. You know Ten. That thick metal Black Card in your wallet.

Last I heard if you stay at Auberge du Soleil they have some "Laundry" openings for guests

via the Concierge.



Back on Topic.

I think the Spectrum is going to really go down the tubes. It just cant make it on the little

franchise guys and the Families at $ 5.00 a crack. The couples that wanted to drop $ 80.00 on dinner and see a movie and maybe go shopping were what made the Spectrum work in the past.

Lets get the teenagers with the baggy pants like the Block and watch what happens.
 
If you are TIC, the money you receive from clients/sf should be the same, right?

Does Javiers cost more than pinkberry per square feet?



As for the Spectrum's reputation, businesses are leaving, but businesses are also coming in.

Just look at Fashion Island. Restaurants, stores, etc continue to leave and they continue

to come. There's a long waiting list...



Frankly, I dont know what kind of margins the businesses were going on in the years past.

Were they really profitable? Or were they just hanging in there?
 
Thanks for the microecon posts, graphrix. That is some scary stuff, though I guess that most of that commercial space is owned by huge companies that can weather the storm.



Still, I wonder, will those numbers keep climbing into the 30s and 40s? Something to BEAR in mind...
 
[quote author="rickhunter" date=1215575776]If you are TIC, the money you receive from clients/sf should be the same, right?

Does Javiers cost more than pinkberry per square feet?</blockquote>


True to certain extent, and as Padre said it is based on location too. I dunno where Pinkberry is at the spectrum, but I know Javier's is and it is a premium location. Aside from that, Fox's location and size is considerably larger. Have you ever seen a ginormous Pinkberry? You need big businesses to fill big spaces. Big money is in alcohol to pay for big rents. Families don't have big bar tabs, tenmagnet and his friends have big bar tabs. The spectrum needs tenmagnets.



<blockquote>As for the Spectrum's reputation, businesses are leaving, but businesses are also coming in.

Just look at Fashion Island. Restaurants, stores, etc continue to leave and they continue

to come. There's a long waiting list...</blockquote>


There is a list to get into the spectrum? Sure, for small businesses, but not large businesses for those large spaces. You will see, it will be a long time before they fill those big holes.



<blockquote>Frankly, I dont know what kind of margins the businesses were going on in the years past.

Were they really profitable? Or were they just hanging in there?</blockquote>


Profit margins on restaurants are small. So, when TIC decides to double their rent from $50k to $100k a month, it could kill the profit. IMO that was a very dumb move by TIC. That place will be vacant for at least six months, and they could have leased it to Fox for $75k like they wanted. But, instead it will take them 18 months to recover from that loss for being vacant for six months. They are being greedy, and they need to stop, otherwise they will not be making the money that they could make if they would just lease the place for what businesses can to make a profit.
 
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