The Small Space Marketplace

List Your Space

Find Space

Home About Us Executive Subscriber Membership RENTV Conferences Newsletter Contact Us Advertise
July 14, 2024
 Search RENTV
   Go!
 The REview
 News
News Home Page
Southern California
Northern California
Pacific Northwest
Texas/Southwest
Retail
Multifamily
Financing
Prop. Management
Archives
Press Releases
 R. E. Marketplace
Service Providers
JobWorks
Property Spotlight
 RENTV  Conferences
Subscriber Login:
  
Email      
    Go!
Password      
Forgot Password?



ETC... ETC... NEWS
Printer-friendly Version   Email an Associate
San Diego Retail Market Remains Strong

2/09/16

San Diego’s retail market displayed positive fundamentals throughout 2015, according to a just-released report from CBRE Research. Construction deliveries contributed significantly to positive absorption and added desirable retailers to the market. Average asking lease rates grew at a steady pace toward pre-recession peaks. Tightening vacancy coupled with limited space for new construction may spark more redevelopment projects in 2016.

The grocery store industry remains a hot topic in the San Diego retail market. Due to a fiercely competitive market, two grocers, Haggen and Fresh & Easy, made the decision to exit San Diego in 2015. The majority of the 25 closed stores were purchased by competing supermarkets looking to increase their presence in San Diego; these include Smart & Final, Albertsons, Bristol Farms, Carnival Supermarkets, Gelson’s and 99 Ranch Market.

The closed grocery stores are expected to reopen in 2016, having no impact on market vacancy even though a few locations went back to the landlords. Fresh & Easy closed 14 stores totaling 166.9k sf, which had a negative impact on vacancy this quarter. Landlords have regained control of a number of these stores, while the remaining locations are anticipated to be auctioned off in early 2016. Fresh & Easy stores are about 14k sf each, making them a better fit for smaller specialty grocers or non-grocery retailers.

After two consecutive quarters of increased vacancy, the San Diego retail market’s overall vacancy rate decreased 10 basis points to 5.7 percent this quarter. While vacancy remained flat year-over-year, the current rate represents a 250-basis-point improvement from the peak of 8.2 percent in Q3 2011.

“Vacancy rates continue to gradually trend down,” said Carrie Bobb, vice president of CBRE in the San Diego region. “Tenant trends include restaurants and boutique fitness (spin studios, yoga & pilates studios, barre studio, etc.) Restaurants continue to be the driver for retail development. Fashion tenants are looking at the restaurant co-tenancy as much as the other fashion and apparel retailers.”

Asking rates in the San Diego retail market increased for the seventh consecutive quarter to $2.16. Del Mar/Solana Beach holds the highest lease rate of $5.74. Rents continue to climb toward the pre-recession peak of $2.41, and CBRE Econometric Advisors predicts that asking rates will surpass this level by Q4 2017.

The San Diego retail market posted 182.7k sf of positive net absorption this quarter after posting negative net absorption in the previous quarter. Central San Diego experienced the majority of positive activity with 125.1k sf; much of this can be attributed to the delivery of the Target at Del Sur Town Center in Rancho Bernardo. Year-to-date net absorption was positive 524.5k sf. A large portion of the net absorption in 2015 was driven by new construction. La Costa Town Square and Village at Pacific Highlands Ranch, both located in North County, were delivered more than 80 percent pre-leased and are now both at least 95 percent occupied. These two centers alone contributed approximately 425k sf of positive net absorption this year. The success of these centers speaks to the strong demand for new, high-quality retail space in desirable areas of the market.

The Target at Del Sur Town Center in Rancho Bernardo, developed by Shea Properties, was the most significant construction delivery this quarter and will include additional shops upon completion. Although limited new construction occurred this quarter, several redevelopment projects remain underway. The Beacon La Costa in Carlsbad is under renovation and will feature the region’s first Equinox as well as several upscale retailers. In Central San Diego, the Shops at La Jolla Village will add a Nordstrom Rack among other retailers, and Westfield has started phase two of redevelopment at Westfield UTC with completion scheduled for 2017.






Return to the Archive page


 


 


 
 
 



Home | About Us | Newsletter | Contact Us | Executive Subscriber Membership | Executive Subscriber Home | Advertise
Southern California | Northern California | Pacific Northwest | Southwest | Retail | Multifamily | Financing | Property Management
Archives | Press Releases | Service Providers | JobWorks | Property Listings

Copyright © 2024 by RENTV, All Rights Reserved
Website designed by Regency Web Services, Inc. and powered by Lightning Media