Burnham's latest market assessment pegs year-to-date sales at nine in comparison to the 21 transactions last year when sellers reaped $58.2 million and a median price per sf of $93. Last year, anchored centers brought a high of $142 per sf and a low of $76 for sellers. Still, the stats can't match 1998, when San Diego County retail property fetched $353 million from buyers and the median price was $114 per sf.

Rick Puttkammer, Burnham's managing director, predicts sales will increase by the fourth quarter. "However, it will take until 2002 before sales will reach previous year's level of activity," he says. San Diego retail, they say, has a stronger upside potential than many parts of the nation. Cap rates varied between 9% and 10.25% in the region.

Grocery-anchored centers reflected the lowest cap rate, coming in at a 9.37% average. What investors fail to recognize is San Diego County's retail cap rates of NOI are actually higher than its other commercial real estate counterparts.

Slowing construction is keeping the 3.9% vacancy rate stable in an 11-year trend, say Burnham researchers. On the absorption side, it too looks good: 1.9 million sf in the first six months. Construction is considerably slower as just six centers prep to add a mere 500,000 sf total in comparison to last year's 1.8 million sf of new product. The slow building will continue as well-located, vacant land practically disappears. The benefactors, say researchers, will be older, well-positioned centers that are prime candidates for redevelopment.

Opportunities are still available in the right locations, emphasizes theBurnham team. "We feel San Diego's retail investment sales market needs to be viewed in a context beyond the national scope to best identify legitimate sound investment opportunities," says Bethea. "However, the traditional real estate mantra 'location, location, location' is now 'location, timing, location.'"