The San Diego retail market had an impressive rebound in the fourth quarter, posting increased leasing activity to the tune of 123,000 square feet positive net absorption. Additionally, according to a new report from CBRE, vacancies decreased in nearly all submarkets and across most center types to 4.9%, which is the lowest since the pre-pandemic era. 

One reason for the leasing activity uptick may be the decline in average asking rates, which dropped to $2.36 NNN per square foot in Q4, a reduction of $0.11 from Q3. It’s the first rate drop in four quarters, but still remains five cents higher than Q4 in 2021.

CBRE’s outlook for early 2023 remains positive, despite inflation and a possible recession. The region’s lofty salaries, expanding tech environment and rapidly growing life science industry has confidence high among retailers. When you toss in tourism and recreational spending, the San Diego retail market should see continued success.