Retailers and developers continue to hunt for opportunities in Southern California and the Phoenix metro, which have begun to see an uptick in construction amid tight conditions for the past several years. With the ICSC@WESTERN show just around the corner, here’s a glimpse into fundamentals and some of the retail highlights in the region.

Among Southern California’s dominant markets, retail vacancy at the end 2024 will range from 4.6% in Orange County to 7.5% in the Los Angeles metro, the latter being the recipient of 550,000 square feet of new construction, according to Marcus & Millichap. Still, the brokerage expects the average rental rates in the metro to increase at least 2% this year after hitting a record $34.05 per square foot in March. Meanwhile, rental rates are projected to rise 4% in Orange County and 1.5% San Diego.

In the Phoenix metro, rent continues to grow at a healthy pace and is expected to reach an average of $20.53 per square foot, according to Marcus & Millichap. While that would represent a year-over-year increase of nearly 5%, it would also be 27% higher than the lease rate in 2019. At the same time, developers will deliver 2.4 million square feet of new construction in 2024, the brokerage reported, and the average vacancy rate could rise 40 basis points to 5.4%.

Highlights from the region:

French Fashion Moves: Courrèges and Amour Vert

The revived French fashion brand Courrèges, founded by modernistic designer André Courrèges in the 1960s, recently opened a boutique in South Coast Plaza, a 2.8 million-square-foot luxury shopping and restaurant destination of the same vintage and owned by the Segerstrom family. Not only did the opening mark Courrèges’ second modern-day U.S. location, behind the launch of a store in New York’s SoHo two years ago, it also is the second time the brand occupied the tony Orange County center. In 1975, eight years after opening, South Coast Plaza brought in a Courrèges boutique to kick off the property’s foray into luxury retailing, according to the South Coast Plaza website.

“For Courrèges, almost 50 years after first introducing the brand to Costa Mesa, reconnecting with this thriving local community thanks to this stunning new boutique feels particularly special and exciting,” Courrèges CEO Adrien Da Maia said. De Maia has guided the turnaround for the past three years following a decade of ownership changes and uncertainty.

Meanwhile, after 15 years of concentrating its business in the San Francisco Bay Area, French-inspired sustainable womenswear brand Amour Vert hopes to leverage a predominant fashion vibe in Southern California, according to WWD. Over the past few months, the brand has opened locations at Westfield UTC in San Diego, 2nd & PCH in Long Beach, Manhattan Village in Manhattan Beach, and Irvine Spectrum Center. It plans to open a store at Westfield Topanga in Los Angeles next year. Amour Vert has also moved its headquarters from the Bay Area to The New Mart, a historical building with showrooms in the Los Angeles Fashion District, where it hopes to capture more wholesale opportunities.

Regency Centers Also Is Paying Attention to SoCal

Hoping to take advantage of strong tenant demand and a lack of supply, Regency Centers has embarked upon a reinvestment and growth strategy in Southern California, according to a company-penned article in L.A. Business First. Among other projects, it is redeveloping Bloom on Third with Arba Group. The 147,000-square-foot, grocery-anchored property sits at the corner of West Third Street and North Fairfax Avenue, directly across from the Grove and The Original Farmers Market. Existing anchor Whole Foods has agreed to occupy a new, two-story, 63,000-square-foot flagship, which will be topped by 311 apartments. Regency Centers and Arba anticipate completion in 2027.

Additionally, the REIT owns four properties near the Los Alamitos Traffic Circle and reported that a new merchandising team is “reinvigorating” the area by freshening up fast-casual restaurant offerings and backfilling a 23,000-square-foot former Staples in the 118,000-square-foot Circle Marina Center with the community’s first Sprouts Farmers Market.

Regency Centers late last year also paid $25.3 million to acquire Nohl Plaza, a 105,000-square-foot asset in Orange County anchored by Vons.

Phoenix Malls to Mixed-Use: Paradise Valley Mall and Metrocenter

Phoenix, too, is seeing its share of redevelopment. High interest rates and elevated apartment deliveries in the market had pushed back the transformation of the 1.4 million-square-foot Metrocenter mall into a mixed-use community. This month, however, Phoenix issued demolition permits. The property, at Interstate 17 and West Peoria Avenue became the first two-story mall in Arizona when it opened in 1973, according to the local NBC affiliate. The mall closed in 2020 during the pandemic, and a development team of Concord Wilshire, TLG Investment Partners, CDS International Holdings and Hines plans to build 2,600 apartments and 150,000 square feet of ground-floor retail and a hotel at the site. The development, to be known as the Village, also will provide access to the Valley Metro light rail system.

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Roughly 10 miles to the east, Red Development is pursuing a 100-plus acre mixed-use project called PV on the former site of the Paradise Valley Mall at North Tatum Boulevard and East Cactus Road. The first phase, which is nearing completion, includes a Whole Foods; a host of restaurants, salons and spas; and 400 luxury apartments. Life Time will kick off the second phase with a 92,000-square-foot athletic club and more than 300 luxury apartments across 11 stories. That project is expected to open in 2026.