The Real Story Behind Retail Vacancy

The retail vacancy rates is continuing to decrease thanks to healthy leasing activity throughout Southern California. According to a new report from NAI Capital, the retail vacancy rate in Southern California was 4.6% in the first quarter, down 20 basis points over last year. Los Angeles led the gains with a 40 basis point decrease in vacancy rates at 3.6%, and Orange County followed closely behind with a retail vacancy rate of 3.7%. The leasing gains are surprising considering the unfavorable narrative about the retail market. To find out more about what is driving activity and why retail is getting a bad rap despite strong leasing activity, we sat down with John Cserkuti, EVP at NAI Capital.

GlobeSt.com: Retail vacancy rates are down again for the first quarter. What is driving leasing activity in this market?

John Cserkuti: For as long as I can recall, consumer confidence played a big part in retail spending, so when consumer confidence went up so did retail spending. Consumer confidence peaked last year, and we are still at high levels. As long as that number is up, consumers are spending quite a bit of money on retail products, so now it is really coming down to what are people buying. Ecommerce is playing a big role here, but there are things that ecommerce will never be able to replace—at least not for sometime.