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Demand Remains Steady for Retail Market
Favorable market fundamentals and strong retail demand anchored Orange County’s Q1 2017 retail market. Those factors countered uncertainty in the big-box sector, as well as changes in the retail climate, according to CBRE’s latest Marketview report.
CBRE researchers found that while vacancy increased slightly in Q1, it still remained at 4%, a level it has not exceeded in nearly two years. The market experienced nearly 198,000 square feet of net absorption, construction deliveries just shy of 112,000 square feet, and an average lease rate of $2.29 NNN, the highest in five years.
Other key report findings include:
- Sales figures for brick-and-mortar stores are aided by mobile and online platforms, pushing total e-commerce sales up 14.3% since 2015, with recent holiday sales increasing by 1.9%
- A restaurant and fast food resurgence kept vacancy below 4%, and asking lease rate growth at an annual average of 4% for the last five years
- Shrinking profit margins has restaurant economists predicting an inevitable slowdown
- Active categories in the big box market include high-end and organic grocer concepts, fitness users, and discount apparel tenants
- Orange County’s vacancy rate is projected to decrease gradually over the next 12 months, with continued steady demand and leasing activity
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Pacific City Photo Courtesy JERDE, Mark Silverstein
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