• News
  • Real Estate
Close-up: Steve Avoyer

Veteran broker keeps pace with San Diego's retail space

Related Special Reports

Steve Avoyer is up before dawn most days, leisurely stretching before jogging 3 or 4 miles along the Mission Beach boardwalk. He savors this early-morning ritual that prepares him "both mentally and physically" to meet the rigorous demands of running a fast-paced retail brokerage firm.

For the 57-year-old La Jolla resident, co-owning the commercial real estate company of Flocke & Avoyer is more akin to racing in a marathon than a sprint. And his years of training -- both on the athletic field and in the competitive business arena -- has given him the strength and stamina to "go the distance."

In the world of retail commercial real estate, Avoyer stands out as a frontrunner in the pack. Along with his partner, Jim Flocke, he operates one of the area's top retail commercial real estate firms. To date, Flocke & Avoyer has completed more than $3.5 billion in total sales and lease transactions, and is the exclusive marketing agent for more than 100 retail projects. These projects combined total in excess of 13 million square feet of retail space throughout San Diego County.

Retail, with its low vacancies and ever-rising rents, has been one of San Diego's shining stars for many years. As part of that meteoric rise, Avoyer and the firm's dozen other brokers have established long-standing relationships and consummated transactions with virtually every national discounter, supermarket, drug store, soft-goods, retailer, theater and home improvement chain active in Southern California. The firm also has client-related work in Riverside, Bakersfield and Austin, Texas.

A self-described "player-coach," Avoyer spends 20 percent of his time managing the 20-person office in the Golden Triangle area of town, and the remaining 80 percent as an active broker handling major clients and keeping pace with the latest retail trends.

A 30-year veteran of San Diego's commercial real estate industry, Avoyer -- who spent 12 years as a retail specialist with Coldwell Banker Commercial Real Estate Services before partnering with long-time friend Flocke in 1985 -- has experienced the cyclical ups and downs of the regional retail market. In 2007, he says there were "higher highs and lower lows" than in recent years. "Overall this year looks to be about the same as last. I'm most proud that we are surviving and finding ways to make deals happen," said Avoyer, a former collegiate tennis champ who attended the University of Southern California on an athletic scholarship.

While he rarely picks up a tennis racket these days, Avoyer has successfully transferred his winning attitude and superior gamesmanship from the hard court to the retail development field, where he and his team provide a wide range of services from leasing and sales to development consultation and tenant representation.

Although the nation's current subprime lending crisis has caused a funding crunch and anxieties about a potential economic recession, Avoyer said San Diego's all-star status may help insulate it from major repercussions in retail development.

"We look at the forecast for 2008 with cautious optimism," he said. "San Diego is certainly better positioned than many other cities in the country to handle any kind of downturn."

In the short term, he said San Diego's retail real estate will continue to thrive, as demand for retail space still outstrips supply. There are plenty of retailers eager to enter the county or expand their existing presence in hotspots from Encinitas to Eastlake.

While North County coastal has long been desirable, the recent opening of the 125 toll road should increase interest in the South County all the way to the U.S.-Mexico border, he added.

"Next year should be a good year, especially if you can figure out a way to break ground on a 20-acre shopping center," Avoyer said, noting that those kinds of deals have long been the cornerstone of his company's business model.

Countywide vacancy rates will increase slightly as new centers are added to existing inventory, while under construction activity is expected to decrease due to a lack of land.

The wild card in retail is the residential market, with slowing housing construction causing some retail developers "to wait 12 to 18 months until rooftops fill in," Avoyer said.

Grappling with high construction costs and a scarcity of available sites, retailers are building stores with parking on the roof, throwing their lots in with larger developments and exploring multistory locations in their continual bid for a piece of the consumer-market pie.

"Most retailers are going to have to be creative to get into the good sites," said Avoyer.

In order to make projects economically feasible at today's land and construction prices, he said developers have to maximize their site coverage. Both developers and tenants are starting to think out of the box, such as taking end-cap instead of free-standing positions and going into multitenant buildings.

According to Avoyer, redevelopment may soon be the only way many retail developers can build here.

"Repositioning of older centers in a mixed-use concept and redevelopment of non-retail land are the key solutions to the shortage of retail space around the region," he said.

In addition, he's also seeing a lot of retail development going up -- two stories and higher. Traditionally, big box retailers shy away from urbanized areas where land values are prohibitive, "but if you want to develop a traditional power center or lifestyle center, you're almost forced to go vertical on it."

Grocery store retailers -- notoriously tough negotiators when it comes to location, signage and design of stores -- are becoming more flexible and letting go of the concept of building cookie-cutter stores.

These retailers, according to Avoyer, are considering more adaptive designs and bringing urban prototypes to other places like the growing suburban markets, where sites are getting smaller and population denser.

Reducing unit size is also a trend in every market segment. "Wal-Mart Super Centers traditionally averaged 150,000 square feet, but the company is now adding more 40,000-square-foot neighborhood markets," he said.

And Tesco's Fresh & Easy Neighborhood Market grocery chain, for instance, is spending $2 billion to build hundreds of small grocery stores in Southern California and the Southwest.

Competitive by nature, Avoyer said these and other retail trends stoke the fire for the real estate business that still burns strongly in the belly.

"I'm in this for the long haul," he said. "And as I tell many of the younger sales brokers in the office, to avoid burn out you have to elevate mentally above all the negative stuff and get over disappointments quickly."

Esterbrooks is a San Diego-based freelance writer.

User Response
0 UserComments