About 2.9 million sf of new retail space will be completed in Orange County this year, according to the report by the local office of Palo Alto-based Marcus & Millichap Real Estate Investment Brokerage Co. But most of the space has been preleased, the study finds, so overbuilding isn't a major concern.
The county's overall retail vacancy rate will be about 8.5%, not much different than last year, says John Przybyla, the Marcus & Millichap regional manager who helped to prepare the report. But there will be plenty of properties put up for sale, he adds, as owners seek to cash-in on the long run up in retail real estate values.
"In spite of the slowing economy, there will be ample opportunity for retail investment in Orange County this year," Przybyla says. "As owners take advantage of value gains experienced during the past two years, a wide variety of properties will come on the market."
Rents in the county should flatten or even decline slightly this year, he adds, reflecting the overall slowdown in retail sales and the lingering effects of the disappointing 2000 holiday sales season.
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