Historically, discount stores have had a difficult time penetrating urban markets, said Bill Dreher, a retail analyst at Deutsche Bank Securities. With the recession opening up a glut of large commercial real estate spaces around the country, retailers have begun to focus on untapped opportunities.
"Both the major discount stores — Target and Wal-Mart — have recognized that to finish 'storing up' the United States they need to have a format which addresses the urban market," he said, adding that city dwellers "tend to have a higher disposable income and higher taste level."
Even warehouse behemoth Costco Wholesale Corp. has begun eyeing opportunities in more crowded areas, announcing over the summer that it would open a handful of stores in mall locations, including one at the Village at Westfield Topanga in Canoga Park.
"The markets that are underserved or attractive these days are urban areas," said David Messner, vice president of real estate at Costco. "As we look at where our holes are, a lot of times it turns out to be those close-in, downtown areas that have high barriers to entry from a real estate perspective.
"With the market downturn, we're seeing more opportunities now than we have in the past. But things are still expensive — no easy deals out there."
Downtown workers said that having a Target nearby would add convenience to their busy schedules.
"A Target would be fantastic — it would be a welcome addition," said Natalie Stone, a research attorney who lives on the Westside but works downtown. "I'd love to be able to pick up basics on my lunch break or on my way home."
With Target on its way, there's only one thing missing from the neighborhood, downtown resident Baisez said: "Trader Joe's."
andrea.chang@latimes.com
roger.vincent@latimes.com
