La Paz Ranch
MALIBU, CA
J. Richard Hill conducted the retail market research study for La Paz Ranch: a proposed 110,000 square foot mixed-use development located in the civic center of Malibu, CA.
Malibu is a relatively long 21 mile strip and narrow residential and commercial corridor located in West Los Angeles County along the Pacific Coast Highway and situated between the Pacific Ocean and the Santa Monica Mountains. With seasonal beach visitors, a diverse residential population of only 12,700, and a significantly constrained real estate market where new development is virtually prohibitive, the owners of a fully entitled site called upon J. Richard Hill to define and quantify the site’s retail potential, opportunities and challenges.
Our research quickly pointed out that the site was surrounded by one of the most densely populated high income markets in the U.S., with over a million people residing in households with incomes in excess of $100,000. We also pointed out that the market was primarily driven by 15,000,000 annual visitors that relax, explore and dine in Malibu, but many local residents spend at a prolific level. We noted with great interest annual retail rental structures exceeding $200.00 a square foot and rent to sales ratios that were non-economic.
The initial analysis defined Malibu as a cultural gateway, iconic brand showcase, and a portal into the lives of brand apostles in the entertainment and sports industries. These conditions were translated into a market positioning and retail merchandising strategy that defined an industry transformative development. Most importantly, our researched studied the sales performance of retailers in the market and found a story of extreme successes and major failures. A more in-depth analysis concluded that a sound merchandising strategy required a mix of high gross margin retailers selling lower volume goods at high price points in highly efficient spaces along with highly unique Malibu lifestyle shops operating in a rental structure that supported economically viable operating platforms.
Guiding Principle
“Maximize the number of shops and food & beverage outlets with smaller than average spaces with focused merchandise assortments of high margin tourist and beach visitor goods to support the demand for high rents.”