Middle Market Digest: This Week in Southwest

Employment news was the biggest headline this week, with brokerage companies bolstering their teams in response to the active market. CBRE, JLL, The Woodmont Co. and Kearny Mesa all added real estate veterans to their expanding teams. JLL, specifically, grew its healthcare group with four new hires. Of course, the employment news means one thing: activity. We saw several deals close this week with a high price tag. SanTan Village Marketplace traded hands for $51.4 million; an industrial facility in Torrance traded hands for $102.5 million and Alta Steelyard Lofts, an apartment complex in Arizona, traded hands for $69.25 million. Plus, a 7,000-square-foot retail pad traded hands for $1,225 per square foot. Here’s a look at this week’s trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

RIVERSIDE—Retail demand is robust in the Riverside market, thanks to low unemployment. Vacancy rates for retail have declined for eighth straight year. The Riverside-San Bernardino metro represents California’s fastest growing economy, having added 260,000 jobs over the past five years. This sustained span of diverse employment gains has supported the addition of nearly 200,000 residents during the same period, boosting local demand for housing and conveniently-located shopping centers. In response, retailers have been in expansion mode while consumer spending continues to escalate. Grocers and personal service-related companies, namely fitness centers and smaller gyms, have been notably active of late, occupying roughly 1 million square feet of combined space in 2017. As retailers continue to scramble for space amid strong economic growth, vacancy will hold at a cycle- low level, prompting rent gains. These market conditions warrant increased development. A rise in retail completions occurs in 2018, yet deliveries are sparse within the Inland Empire’s largest cities, including San Bernardino, Fontana and Rancho Cucamonga. Instead, roughly half of this year’s deliveries are in Rialto, outlying Hesperia and the Coachella Valley. Overall, at least 70 percent of this year’s new supply is pre-leased, heightening retailer demand for existing space.