CenterCal Properties

CenterCal 2CenterCal’s retail developments are more than just places to shop.

By Jim Harris

Fred Bruning knows firsthand that a real estate developer’s perspective on the properties they own can vary greatly. During his 40-year career, Bruning gained experience in several different styles of retail development.

After graduating law school in 1977, Bruning worked for Sears Roebuck and Co. (now Sears Holdings) for six years in its transactional law and real estate development departments. Bruning then worked for several retail development companies including a Manhattan Beach, Calif.-based company that grew from being a family-owned company to a publically owned real estate investment trust (REIT).CenterCal info box

“Wall Street has a very different view of real estate than a private company does,” he says. “A private developer looks at a retail center as an asset for the community and ascribes more importance to the quality of the center and how it fits into the community instead of just looking at its size and potential for asset growth.”

In 1998, Bruning and partner Jean Paul Wardy – an associate of Bruning’s at the public REIT – started CenterOak Properties, a Western U.S.-based developer. Although Bruning calls the company a great professional experience, CenterOak’s capital partner believed in taking a short-term, closed-end approach to properties instead of retaining and developing retail centers for the long term.

Centers of Activity

Bruning and Wardy’s community minded development philosophy led them to establish CenterCal Properties in 2004. The two found a like-minded capital investment partner in the California State Teachers Retirement System, which was seeking long-term venture opportunities.

“We wanted to develop properties that make a difference in the communities they serve,” Bruning says. “We feel the securitization of the industry had led to a lot of sameness among retail properties – they all look alike, and have become one-dimensional locations where you only come to shop. We wanted to create places where people could come back three to four times a week as opposed to just once every six months.”CenterCal

Retail centers developed and owned by CenterCal vary in size, but all typically include different types of businesses. These include grocery stores, fitness centers, movie theaters and other entertainment venues, and several restaurants. “The idea of having a convenient place that is efficient and where you can fill different needs is at the core of our company,” he adds. “There aren’t many companies that are place-making right now.”

CenterCal’s retail centers also include public parks and gathering places. “We find centralized sites [for our developments],” Bruning says. “People who go to our centers are seeing their neighbors more than they used to, because they’re going to one spot instead of several disparate locations.”

Bruning sees the company’s developments as being compatible for future use by major ecommerce retailers such as Amazon that are looking to build fulfillment centers or stores. “We think that Internet businesses can thrive in the places we create,” he adds. “If we are the cool place where people want to gather, that’s where those companies will want to stake their brick and mortar claims.”

Ongoing Projects

One of CenterCal’s newest centers will open this fall. Work began in April 2016 on The Veranda, a nine-building center with 375,000 square feet of gross leasable area in Concord, Calif. The center will be anchored by a Whole Foods 365 store and a 10-screen movie theater. Other tenants include Toys R Us, City Sports, TJ Maxx and Old Navy. The Veranda will also include 24,000 square feet of available office space.

The Veranda’s signature feature will be a park area with a show fountain. The park will include a “one-of-a-kind” play structure and will be surrounded by pavilions featuring food and other vendors, Vice President of Construction Eric Wilson says.

The company’s ongoing projects include 2nd & PCH in Long Beach, Calif., a 218,000-sqaure-foot, five-building center anchored by a Whole Foods store. Demolition of a former hotel on the site is anticipated to begin in October, with the project scheduled to open in 2019.

In addition to its projects in California, CenterCal also works in the Pacific Northwest as well as in Idaho and Utah. Recent projects in this region include The Village at Totem Lake, a mixed-use retail and residential complex in Kirkland, Wash.

CenterCal’s in-house construction management department oversees all of its projects. The company also handles its own property management, leasing, accounting and tenant coordination functions. “All of the people in our construction department come from a building background,” Wilson says of CenterCal’s relationships with the general contractors it oversees. “We can empathize with, understand and relate to general contractors’ needs and the challenges they face on a project, and can make decisions that help them – and us – get a project completed on time.”

Bruning credits CenterCal’s project success to its staff. “We have an incredibly talented and very diverse group of associates,” Bruning says. “We have a positive impact on the community not only on the economic side but on an intangible level of strengthening social ties in the community, which I saw the industry losing a bit as it became more securitized.

“Everyone here is focused on the idea of creating amazing places for the communities we serve,” he adds. 

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