Most of the 2.5 million sf leased in 2000 was taken in centers anchored by national chains--a large boost over 1999's 1.6 million sf, says Kent Williams, regional manager for Marcus & Millichap's local office.
Williams predicted that 2001 would be even stronger, with an estimated 2.9 million sf reaching completion, according to the report. But increasing costs and other economic factors will force lower absorption next year, down to an average of two million sf, according to the report.
In the report, Williams says San Diego's retail (construction) market "has exploded during the past several years."
"Transforming itself from a Navy town to a booming high-tech and biotechnology center in less than a decade has spurred San Diego's economic growth and created a thriving market," he adds.
High absorption levels have been supported by the area's economic expansion and population growth, according to the report. After reaching a low of 4.5% in 1999, average vacancy rates remain stable at an average of 5.2%, the M&M report says.
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