16 Nov 2018

RETAIL ROUNDUP: Third Quarter 2018 Retail Market Highlights

As the Southern California retail market prepares to close out the year, vacancies have compressed to historically low levels. Through third quarter, Los Angeles and Orange County vacancy rates fell to 3.9 and 3.4 percent, respectively. The region has not avoided department store closures, but a select group of tenants continue to back-fill space. New fitness center leases dominate some of the largest leases signed in third quarter.

 

Q3 Retail Report – Los Angeles County

LOS ANGELES Q3 2018 Q2 2018 Q3 2017 % Change v. Q3 2017
Vacancy Rate 3.9% 3.8% 4.0% -2.5%
Net Absorption 83,579 sf -295,878 sf 829,624 sf -89.9%
Vacant Space* 17,303,300 sf
Under Construction** 1,637,484 sf
Unemployment (LA) 4.8% 4.1% 5.4% -11.1%

 

Largest LA lease signings in Q3 included:

  • 61,995 sf LA Fitness at Plaza La Cienega, 1831-1835 La Cienega, Los Angeles – Downsizing of Smart & Final and former 24-Hour Fitness space
  • 54,762 sf Home Goods / Marshall’s at Studio City Place, 11211 & 11239 Ventura Blvd., Studio City – Newly renovated, former Office Depot
  • 28,000 sf Smart & Final at 7th & Garey, 701 South Garey Avenue, Pomona – New development
  • 21,440 sf Planet Fitness at Vons Circle Center, 1890 Ximeno Ave., Long Beach – Former Rite Aid
  • 17,000 sf Blink Fitness at Rancho Marketplace, 1060 W Alameda Ave., Burbank – Former Staples

 

Q3 Retail Report – Orange County

ORANGE COUNTY Q3 2018 Q2 2018 Q3 2017 % Change v. Q3 2017
Vacancy Rate 3.4% 3.8% 4.1% -17.1%
Net Absorption 841,402 sf 47,742 sf -6,629 sf -12%
Vacant Space* 4,904,222 sf
Under Construction** 464,877 sf
Unemployment (LA) 2.8% 2.6% 4.3% -34.9%

 

Largest OC lease signings of Q3 include:

  • 93,254 sf at Mercantile East, 27426 Antonio Parkway, Ladera Ranch – Former Kohl’s, sublease
  • 76,992 sf at 2101 W Imperial Highway, La Habra – Former Vons
  • 42,000 sf Michael’s at Mission Viejo Freeway Center, 25462 El Paseo, Mission Viejo – Former Sports Authority
  • 29,851 Target at Puerta Real Shopping Center, 27551 Puerta Real, Mission Viejo – Former Sports Chalet

 

Q3 Retail Report – Inland Empire

INLAND EMPIRE Q3 2018 Q2 2018 Q3 2017 % Change v. Q3 2017
Vacancy Rate 7.3% 7.3% 7.5% -2.7%
Net Absorption 512,258 sf 725,290 sf 235,661 sf 117.4%
Vacant Space* 14,189,950 sf
Under Construction** 1,826,794 sf
Unemployment (Riv Cty) 4.4% 3.8% 6.4% -32.3%

 

Largest IE lease signings of Q3 include:

  • 39,324 sf Chuze Fitness at Orchard Plaza, 9059 San Bernardino Road, Rancho Cucamonga – Former RC Family Sports Center
  • 15,030 sf Planet Fitness at Washington Park, 78987 Highway 111, La Quinta – Former Office Depot
  • 18,000 sf West Elm Outlet at Stoneridge Towne Centre, 27300 Eucalyptus Ave., Moreno Valley – Former Office Max

 

Sources: California Employment Development Department; Co-Star; Coreland Companies

*Vacant Space calculation now inclusive of retail properties within each county; **Former New Construction Delivered now tracked as projects Under Construction.

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