San Jose retail center lands new merchants as Hobby Lobby preps space

SAN JOSE — Hobby Lobby has begun interior construction work for its new store at a San Jose retail center that has also landed a Benihana restaurant and other merchants, offering bright prospects for the complex.

The new merchants are arriving at Almaden Plaza, which is located at 5353 Almaden Expressway in south San Jose, according to Bay Area commercial real estate broker Jim Fletcher.

Hobby Lobby has leased 63,000 square feet by taking a former Bed, Bath and Beyond store in Almaden Plaza, which is near the interchange of State Route 85 and Almaden Expressway.

Separately, Benihana, a high-profile Japanese sushi and steak house, will exit its current Cupertino location at the nearly deserted Vallco Mall and take over a space once occupied by Red Lobster, a bankrupt restaurant chain that closed numerous dining sites in recent months.

The Benihana restaurant will take over a 9,500-square-foot dining site that Red Lobster once occupied, according to Fletcher.

Here are some of the other merchants that are moving into Almaden Plaza:

— Crumbl Cookie has leased 2,300 square feet in a former Weight Watchers space.

— Xfinity has leased 3,200 square feet near the shopping center’s Ross store

The largest of the new merchants, though, is Hobby Lobby, which is poised to be a high-profile anchor in the center, according to Fletcher.

“Hobby Lobby is a demolition permit so they can do all the construction they need to build out the store,” Fletcher said.

It wasn’t immediately clear when the store might open or if it would be ready for customers during the upcoming holiday shopping season.

Hobby Lobby plans to install a large vertical sign outside the entrance to the second-floor store where the retailer will operate.

“Their sign will really stand out when its up and running,” Fletcher said. “The store will have phenomenal freeway visibility.”

The new Hobby Lobby store will be the first San Jose location for the retailer.

For Almaden Plaza, the new merchants are a reminder of both the opportunities — and challenges — that face centers with spaces that are primarily suitable for big-box retailers.

“It’s getting more difficult in retail,” Fletcher said. “There are a lot of tenants that are not in the market any longer because of the changes from the Internet.”

An ongoing years-long shift towards online shopping and electronic commerce and away from in-person visits to brick-and-mortar stores has squeezed a growing number of retailers.

Still, shopping centers are responding to the new economic pressures.

“Retail reinvents itself all the time,” Fletcher said. “Tenants are also trying to find new ways to operate.”