The Acadian Village shopping center on Perkins Road is expected to soon dump 16,000 square feet of vacant space onto the local market, raising questions about what the potential impact might be on the center once one-fifth of its total square footage is up for grabs.
The available space results from the recent departure of one tenant and planned closing of another. In November, Provisions on Perkins—the 6,000-square-foot outparcel restaurant formerly occupied by Galatoire’s Bistro—closed after less than 15 months of business. Then, last month, Pier 1 Imports announced its 10,000-square-foot space in Acadian Village was among 450 store locations the company would shutter nationwide. (Some employees say they expect Pier 1 to close by mid-March, though a date still hasn’t been specified.)
“I doubt those two tenants leaving would make others give up on the center,” says Wesley Moore, an appraiser with local firm Cook, Moore & Associates. “It’s still a really strong location that supports attracting replacement tenants in fairly short order. But it comes back to whether they’re realistic in their asking price.”
It’s not immediately clear how much Alpine Acadian LLC—the Dallas-based group that purchased the development in 2018 for $38.2 million—is asking for either space. Neither is currently being marketed on the LACDB, and the property’s leasing agent, Walt Davis of the Dallas-based Lincoln Property Company, did not respond to multiple requests for comment before this afternoon’s deadline.
Moore expects Alpine to ask replacement tenants for higher rents than their immediate predecessors, but notes the market will ultimately decide where they’re able to land on their rates.
When the center opened in 2013, the first 16 tenants were charged an average rental rate of $26 per square foot. Because of its larger space, Pier 1 is estimated to have paid between $21-22 during its first five-year lease, which could have ticked up to the $23-24 range in recent years, still considered a reasonable rate today given the space’s prime location.
Meanwhile, records obtained by Daily Report in 2014 show that, by 2016, Galatoire’s was scheduled to ultimately pay $40 per square foot, which included its rent on top of an additional cost linked to an amortized reimbursement to cover the restaurant’s buildout. Daily Report was unable to confirm how much Provisions on Perkins was paying in rent; however, sources familiar with the property say it’s unlikely Provisions paid as much, given the age and history of the building. Based on these factors and others, Acadian Village could reasonably expect to fetch between $30 and $33 per square foot in rent for the restaurant space.
“It’s a great location, but it’s also on its third tenant,” Moore says.
Local leasing agents expect interest in both spaces to be high, based on the center’s demographics. The average household income within a 1-mile radius is $101,808, according to a marketing brochure from Lincoln Property Company, with the same area seeing a daytime population of 10,213 people.
But until replacements are secured, will the center’s other tenants see spikes in rent? Moore doesn’t think so.
“All those tenants have long-term leases, most on their initial 5-10-year lease terms. You can’t just raise rents or change fixed rates on those,” Moore says. “When they come up for renewal, it’s always subject to renegotiation—they could renegotiate those down, but they never renegotiate them up.”
Acadian Village opened nearly seven years ago as an $18 million development. Since then, it’s been sold twice and has attracted a number of upscale national and regional tenants who signed long-term leases within the now-80,000-square-foot center, including Trader Joe’s, Acme Oyster House, Lululemon, Petco and The Ruby Slipper.
