The retail automobile business in Santa Monica is going through a burst of business growth – and real estate expansion. Driven by “aging baby boomers” who have bought their homes and put their children through college, today’s “market for high line cars is excellent,” says Mike Sullivan, the “L.A. Car Guy” who owns several dealerships in Santa Monica. He notes that the market share occupied by “high line” autos has grown from six percent to 12 percent of auto sales in the last 10 years, and that growth has translated into real estate expansion in this high line town.
W. I. Simonson Mercedes-Benz opened a new state-of the-art service facility with lots of elbow room at 14th Street and Colorado Avenue in January 2006, thereby freeing up space for showroom and sales at its longtime Wilshire Boulevard location. Hornburg Santa Monica christened a new showroom for its Jaguar and Land Rover lines with a gala reception at Santa Monica Boulevard and Berkeley Street in October of this year. Infiniti opened a spacious new service facility on Michigan Avenue near Cloverfield Boulevard in early November. And Lexus Santa Monica is now doing an extensive makeover on the old Cummings Buick space at 1501 Santa Monica Boulevard to which it will move from its present cramped quarters in February 2007.
Lexus, one of Sullivan’s agencies, has been at 25th Street and Santa Monica Boulevard since the line was launched in 1989; it will move from a showroom that displays three cars to one that will display 16 – from six sales offices to 23. General Manager Don Mushin says that this expansion will not involve any increase in his sales staff, but will simply provide the existing staff with the room it requires. “We have three people to an office now, and we have space in the medical building across the street.”
The new facility represents $6 million in tenant improvements and will give Lexus 24,000 square feet of showroom space (as compared to the 4,000 it now has) and 29,000 square feet overall for its 140 employees. The early California design has been executed by RTK Architects (who designed the new Simonson Mercedes building on Wilshire), and the new building will feature a porte-cochere entrance off 15th Street and a concierge to direct customers as they enter the spacious showroom.
Mushin says that his only real concern about the upcoming move is that the agency may lose the “energy” that permeates its present cramped quarters. “Dynamics change,” he says, and it may take time to adjust to the larger quarters. But the agency needs the space because “we never have enough cars,” and the money spent on bricks and mortar translates into a larger allocation from the manufacturer.
At Santa Monica Ford, owner Ron Davis has no intentions of moving the agency to a new location even though his business is “good.” He acquired the Ford dealership four years ago – then in business under only two owners since 1947 – and added the Lincoln-Mercury line in June of this year. He is pleased that he has ample land capacity at the 1230 Santa Monica Boulevard location and across the street, although he does intend to do some updating and remodeling within the next 18 months.
Davis’s business is up over last year, he says, and one of the reasons he cites is Lincoln-Mercury sales, echoing Sullivan’s comments about the market for high line cars in Santa Monica.
Although the Ford/Lincoln-Mercury agency enjoys adequate space on Santa Monica Boulevard for sales and parts and service, the company also has two lots on Broadway to supplement its “on-site” space for automobile inventory. Space in the Broadway/Colorado neighborhood seems to be a necessity for Santa Monica’s growing auto business. Simonson’s new service facility is on Colorado at 14th Street; Lexus will be opening a new service department next year at the former post office property on Colorado at 11th Street. And Infiniti of Santa Monica last month opened a sparkling new service facility in the same area at 2211 Michigan Avenue.
At the Infiniti ribbon-cutting, agency owner Damon Shelly of the Irvine-based Shelly Group said that when he purchased Infiniti of Santa Monica he was “dismayed by the facility” which looked like it “should have been in the Third World.” The new service department is First World, and it certainly is spacious.
More space seems to be what the local car business needs and what it is taking. As Mike Sullivan says, to be in the retail automobile business in Santa Monica today, “you really gotta be in the real estate business.”