Retail

This will be an exciting, yet cautiously optimistic, year for retail real estate, according to Mark Koenig of BT Commercial/Terranomics. He points to Robertson Property Group being under construction in Petaluma on its 166,700sf Redwood Gateway center, which is slated for a fourth-quarter opening for anchor Kohl's department store. The center also has prospects from Michaels Stores and Pier One.

Also last month, Basin Street Properties broke ground on the 1,400-seat movie theater and 530-space parking garage component of its $100 million-plus Petaluma Town Center project. In addition, Florida-based shopping center development giant Regency Centers is eyeing redevelopment of the Kenilworth Junior High School site in Petaluma.

Retail activity outside Petaluma is promising, too, according to Mr. Koenig. The city- and voter-approved Lowe's home improvement store planned for Monahan Pacific's Cotati Commons may get under construction this year. Also, Kohl's is angling for a store in Santa Rosa to round out its nine-store push throughout the Bay Area, according to Mr. Koenig, who with partner John Schaefer represents Kohl's locally.

Some large spaces that have been vacant for a while could see action this year. Case in point is the 100,000sf former House2Home space at southwest Santa Rosa's Stony Point Plaza, which could have a new, as-yet-undisclosed tenant as early as April, predicts Mr. Koenig, who is involved in the deal.

Retail vacancy rates have remained in the mid to low single digits throughout the recession and dot-bomb, and they are expected to remain that way, predicts Mr. Koenig, considering much of the new space to be built is already spoken for.