Life Plaza Center in San Gabriel used to teem with diners heading to Green Village, a Chinese restaurant in the middle of the horseshoe-shaped mall on Valley Boulevard.
But after the eatery closed five months ago, the 7,500- square-foot space remained vacant. With no tenants stepping forward and fewer customers clogging the parking lot, the plaza is quiet, with a curiously dark core.
For The Record
Los Angeles Times Tuesday, November 25, 2008 Home Edition Main News Part A Page 2 National Desk 1 inches; 45 words Type of Material: Correction
Mall vacancies: An article Monday in Business about mall landlords' challenges in the economic slump incorrectly said that Mervyns closed in October. The department store chain announced last month that it would liquidate its assets, but it is still conducting going-out-of-business sales at 149 stores.
It's a scene repeated in various forms throughout the region, as the economic crash that started rolling through single-family housing more than a year ago begins to hit shopping centers, turning what had been a residential phenomenon into one that threatens commercial real estate as well.
Business is so bad that an increasing number of retailers are calling it quits -- without waiting to see whether money can be made as the Christmas season gets underway.
The department-store chain Mervyns closed in October -- at about the same time Linens 'n Things Inc. and Shoe Pavilion Inc. launched going-out-of-business sales. This month, Circuit City Stores Inc. filed for Chapter 11 bankruptcy protection just days after announcing it would close 155 underperforming electronics stores and seek lower rents at others.
For property owners, the loss of tenants means more than a reduction in the revenue that is collected from rents. If one store closes, customers are less attracted to the center overall, and the losses can snowball. Whereas in previous years it was easy to find new tenants, now they are scarce. And as the property owners find themselves getting in trouble, their typical recourses -- to sell the building or refinance it -- are also stymied by the stuck economy.
At Life Plaza Center, the lack of interest from potential new tenants has surprised the plaza's management. Located between Del Mar Avenue and San Gabriel Boulevard, the mall is situated in the heart of a long-thriving ethnic Chinese community. Potential tenants used to abound.
"We were charging $2.75 a square foot, but if we can get $1.75 for it, we'd be very lucky now," said Art Ko, a leasing agent for STC Management. "It's hard to even grasp what's a fair market price now. Everything is up in the air. We've had many deals where people just walked away the last minute. It's a buyer's market."
Ko's company manages dozens of properties in Los Angeles and Orange counties. In recent months, they've experienced a rise in delinquent renters. One plaza in Rowland Heights has been hampered by a closure, an upcoming eviction and a business for sale.
