Third Quarter saw a slight improvement across the Los Angeles, Inland Empire and Orange County retail markets, and remains significantly improved over the last year. While vacancy rates continue to decrease, overall transaction volume is experiencing a slight drop likely due to a continued reduction in inventory. What was the buzz on the floor of the ICSC Western Division conference in San Diego last month? See Food, Entertainment Remain Key Retail Drivers, for our take on the retail landscape.
Q3 Retail Report – Orange County
| ORANGE COUNTY | Q3 2014 | Q2 2014 | Q3 2013 | % Change v. Q3 2013 |
|---|---|---|---|---|
| Vacancy Rate | 4.7% | 4.9% | 5.3% | -1.13% |
| Net Absorption | 250,685 sf | 601,562 sf | 376,894 sf | -33.49% |
| Vacant Space | 345,515 sf | 406,805 sf | 395,217 sf | -12.58% |
| New Construction Delivered | 32,040 sf | 290,473 sf | 53,606 sf | -40.23% |
| Unemployment (OC) | 5.1% | 5.0% | 6.2% | -17.74% |
Largest lease signings of Q3 include:
- 47,277 sf Jerome’s Furniture at Pacficenter Anaheim ― Former Home Expo
- 46,000 sf Hobby Lobby at MetroPlace, Santa Ana ― Former Orchard Supply Hardware
- 40,000 sf Whole Foods Market at Los Olivos Shopping Center, Irvine ― First Whole Foods in Irvine, anchoring 120,000 sf ground-up development. Expected open late 2015.
- 29,500 sf Nordstrom Rack at Center at Rancho Niguel, Laguna Niguel ― Former Loehman’s. Expected to open spring 2015.
- 28,340 sf Equinox at Pacific City, Huntington Beach ― Ground-up development expected to be completed summer 2015.
Q3 Retail Report – Los Angeles County
| LOS ANGELES | Q3 2014 | Q2 2014 | Q3 2013 | % Change v. Q3 2013 |
|---|---|---|---|---|
| Vacancy Rate | 4.8% | 5.0% | 5.3% | -0.94% |
| Net Absorption | 706,774 sf | 389,145 sf | 725,587 sf | -2.59% |
| Vacant Space | 712,753 sf | 710,783 sf | 844,743 sf | -15.62% |
| New Construction Delivered | 338,209 sf | 235,357 sf | 208,328 sf | 62.34% |
| Unemployment (LA) | 8.1% | 7.3% | 9.4% | -13.83% |
The largest lease signings in Q3 included:
- 40,598 sf at 12000 Firestone Blvd., Norwalk ― Former Keystone Automotive Dealership
- 30,000 sf Vallarta Supermarket at 7902 Imperial Hwy., Downey ― Former Beachs Market
- 25,357 sf Super Fresh Market at 19317 Soledad Canyon Road, Santa Clarita ― Former Sabor Latino Supermarket
- 24,187 sf Marshalls at Hollywood & Western, Hollywood ― Redevelopment of former single story building and longtime Thai Hot Dog Stand
- 19,120 sf Universal Fitness Club at 2160 Palmdale Blvd., Antelope Valley ― Former 24-Hour Fitness
Q3 Retail Report – Inland Empire
| INLAND EMPIRE | Q3 2014 | Q2 2014 | Q3 2013 | % Change v. Q3 2013 |
|---|---|---|---|---|
| Vacancy Rate | 8.3% | 8.5% | 8.7% | -0.46% |
| Net Absorption | 255,288 sf | 281,515 sf | 343,466 sf | -25.67% |
| Vacant Space | 505,873 sf | 522,772 sf | 542,522 sf | -6.76% |
| New Construction Delivered | 73,097 sf | 297,403 sf | 130,970 sf | -44.19% |
| Unemployment (IE) | 8.7% | 8.0% | 10.4% | -16.35% |
Largest lease signings of Q3 include:
- 55,440 sf Hobby Lobby at Highway 111/Bob Hope, Coachella Valley― Ground-up location
- 46,134 sf Clark’s Nutrition and Natural Foods at Mountain Village Plaza, Chino ― Former Ralphs. Fourth location for Inland Empire-based, high-end health food market.
- 24,365 sf The Fresh Market at El Paseo Square, Palm Desert ― Fourth store to open in California.
- 12,200 sf Hibachi Grill at Tyler Village, Riverside ― Free-standing building. Former site of Mexican Restaurant.
- 10,724 sf Bounce House Amusement Center at Green River Promenade, Corona
Sources: California Employment Development Department; Co-Star; Coreland Companies