High-cost environment proves challenging, even though much of California’s available retail is in high demand, shares Coreland’s Chris Premac.
By Nellie Day | September 2024 | As published by Shopping Center Business
In many ways, California’s retail landscape is chock-full of good problems. For landlords, rents are high and holding steady, if not increasing, as tenants clamor for every available space.
“The most significant retail trend affecting the market is the fact that there is very little vacancy overall,” says Chris Premac, vice president of retail brokerage at Coreland Companies in Tustin. “Demand for quality space outweighs availability.”
Tenants are in demand, too. Many that survived, evolved and thrived post-pandemic are on the most-wanted lists for not just landlords, but city officials.
All this retail demand should be a good thing, but today’s high costs have dampened the mood for many. Inflation and higher interest rates have prevented some developers from building more retail projects, others from renovating existing assets and another subset from pursuing deals that might have looked attractive a few years ago.
These factors have also prevented some tenants from expanding at the rate they would have liked. Many brands must also determine how much of these added expenses they can incur…and how much they can reasonably pass onto the consumer. “There’s no denying that rising costs in land, construction, labor and interest rates have put pressure on the retail development industry,” says Wayne Williams, vice president of retail marketing for Upland-based Lewis Retail Centers. “These challenges have ultimately led to tighter margins for everyone involved — both tenants and property owners. (Read More)
Go to Shopping Center Business for the complete article, page 28.