Will L.A. Absorb the 1MSF of New Retail Projects?

LOS ANGELES—The retail market staggered in the first quarter of the year, with vacancy rates climbing by 20 basis points to 4.7% and negative absorption rates, according to the first quarter reports from Colliers International. It isn’t uncommon for retail to slow in the first quarter after the holiday rush, but with 1 million square feet of retail product under construction, market experts wonder if the new supply will be absorbed.

“In a macro sense we have too much retail period.; however, in underserved sub-markets, retail is necessary to serve the increasing population due to the construction of multifamily and condo high rises,” Christopher E. Maling, EVP of retail investments at Colliers International, tells GlobeSt.com. “It is site specific and market demand for certain locations will drive rental rates.”