Missing the Target

If you've been keeping up with the real estate development headlines lately, you might have noticed that every big, ambitious LA development plan includes a Target as its desired anchor tenant. Projects at various phases of development in Mid-City, Crenshaw, Hollywood, Westwood, and Downtown all tout Target as their crowning retail centerpieces. Some actually have the stated support of the Target Corp., while others merely crave the discount store's shiny urban appeal or its supposed potential to spur surrounding retail growth. The CRA has been lusting after Target for years in its attempt to turn a stretch of Washington Blvd south of Downtown into a dense big box haven. Oxymoron?

But why target Target? Perhaps developers point to the success of the West Hollywood Gateway, a project that has seen enormous traffic for its own tenants but has done little to turn around that languishing stretch of Santa Monica Blvd in eastern WeHo. Or perhaps they see Target much in the way the rest of us see it: as the hipper, cleaner alternative to those other trashy discounters we are loathe to visit. But the truth is that as a company, Target is in no position to expand its retail locations as aggressively as these developers might like. Neither is the Los Angeles customer base large enough or desirable enough to support a wealth of new stores.

Wal-Mart on the other hand, may take the cake on both these fronts. It is Wal-Mart, not its snooty rival, that has benefitted most from the recession, as many consumers seek deep discounts on their purchases rather than cut them out altogether. Secondly, Wal-Mart is aggressively studying a plan to roll out a new retail format that is much smaller than its traditional supercenter, and better fitted for urban real estate and the urban consumer. With Wal-Mart's small town and suburban locations built out, and no signs of slowed growth, that company is turning to a new potential demographic - a smart move considering the increasing costs of suburban living and the languishing retail opportunities there. Furthermore, Wal-Mart has but one location in our city limits (albeit a successful location), housed in a stately multi-story Baldwin Hills Crenshaw Mall location that was once home to a Sears. Should their new urban shop implementation work, I see no better place for a roster of mini Wal-Marts than Los Angeles. And as long as our developers are scrambling to attract their treasured Target, Wal-Mart is sure to score some good rental deals.