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Close-up: Bill Thaxton

Flocke & Avoyer senior VP unfazed by recession

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In the middle of what has been a tumultuous retail market, Bill Thaxton has been an area of calm.

Thaxton is a Flocke & Avoyer senior vice president with 30 years of experience in the leasing and sales of retail properties in San Diego, Riverside and Imperial counties. He worked for what was Coldwell Banker Commercial (now C.B. Richard Ellis) for a decade prior to Flocke & Avoyer. He has handled 14 major grocery store transactions totaling $231.54 million, countless leases and is frequently involved in the early planning stages of shopping centers throughout the county.

In addition, Thaxton has assisted with the site selection process for such retailers as Ralphs, Food 4 Less, Sav-On, Wendy's and Comerica Bank.

What may give Thaxton the most pleasure in his profession is being involved in the planning for new retail centers. Some of these developments have included the 261,000-square-foot Creekside Marketplace in San Marcos, the 111,000-square-foot City Heights Village Center, the 110,000-square-foot nearly leased Bressi Village Center in Carlsbad, the 95,000-square-foot Market Creek Plaza in Southeast San Diego, the 87,000-square-foot Torrey Hills Center and the 72,000-square-foot Albertson's-anchored Alpine Village Center in Alpine.

Alpine Village took about a decade from concept to completion.

Bill Thaxton

"People noted it took less time to fight World War II than to get a grocery store in Alpine," Thaxton said.

Thaxton, who reported the Bressi Village Center is 90 percent occupied with another 5 percent of leases out for signature, said existing tenants include Stater Brothers, Trader Joe's, a J.P. Morgan Chase Bank branch and a host of others, including a new Souplantation faster food concept called Souplantation Express.

Thaxton has been working on a few projects still in the planning stage, include the proposed 284,000-square-foot La Costa Town Square, and the 250,000-square-foot planned Rhodes Commercial Center in the Torrey Highlands area.

Planned retail construction is also alive in well, he said, in projects such as Sudberry Properties’ 185,000-square-foot Palomar Commons Shopping Center in Carlsbad and the 900,000-square-foot commercial portion of Sudberry's Civita mixed-use development on the northern edge of Mission Valley.

On the leasing side, the retail specialist said vacated store spaces are getting refilled, though maybe not as fast as many would like. Thaxton said small spaces in well-anchored centers are generally releasing first, but noted that old Mervyn's, Linens 'N Things, and Circuit City outlets are getting refilled with such tenants as Kohl's, Sprouts, Fresh & Easy and Best Buy (NYSE: BBY).

Even the old video store spaces -- Thaxton expects Blockbuster Video, which is in Chapter 11 bankruptcy, to have no open stores by the end of the year -- are gaining a new lease on life. In Rancho Penasquitos, where both Hollywood Video and Blockbuster have closed stores, a Discount Tire store is going into the Hollywood Video space and Union Bank, which has been operating in a small storefront in a Vons-anchored center, is moving into the larger Blockbuster location.

Still, Thaxton said there will be plenty of spaces to fill in the coming year.

"Bookstores are particularly vulnerable," Thaxton said.

Restaurants, which may struggle in the best of times, are getting replaced with new tenants when they fail. For example, spaces formerly occupied by Johnny Carinos have seen the spaces replaced by the likes of such firms as Phil's Barbecue and Jersey Mike's.

With only a limited amount of desirable retail-zoned land available, Thaxton is concerned about what the proposed elimination of redevelopment agencies would mean for future retail projects.

"It would be a shame to lose that. Look what was able to be done with City Heights and look at all of downtown," he said.

Thaxton would like to see some of those redevelopment monies used to redevelop the old post office site at Rosecrans Street and Midway Drive.

"A lot could be accommodated there. It has 26 acres and could be occupied by a Lowe's or a Costco," Thaxton added.

As for the current market, he said the vacancies are beginning to come down and lease rates have firmed up as well. Surveys vary, but the vacancy range appears to be between 5 percent and 7 percent. At one point during the middle of the last decade, the retail vacancy stood at less than 3 percent in the county.

Lease rates that spiked in the mid-2000s, and plummeted later, have since stabilized.

"In some prime locations the rates are actually going back up," he said. "Rates had risen pretty rapidly prior to the downturn."

When asked what kind of retailers look strong in this economy, Thaxton said grocery-anchored centers are almost always a good bet. He noted that the current craze is gourmet burgers from Smashburger to Sliders. Thaxton said self-serve yogurt places where the price is determined by weight are another big fad.

Landlords and prospective buyers aren't just looking at concepts to fill their spaces.

"Buyers are looking at the intrinsic value of the real estate. If the tenant goes away, they want to know who can replace them and what rent they can afford to pay," Thaxton said.

While his 2010 statistics were not available, Thaxton has handled more than 600 transactions totaling more than $712 million through 2009. His investment sales have ranged from the sale of the Torrey Hills Center for $36.75 million to the sale of the Sweetwater Town & Country Center in National City for $20.92 million.

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