The report lists Los Angeles County in seventh place; Orange County in second; and the Inland Empire (Riverside-San Bernardino) in the ninth slot among the Top 10 in the US in the annual Marcus & Millichap National Retail Index. Nearby San Diego County is ranked third. The index is a snapshot analysis that ranks 38 retail markets nationwide based on a series of 12-month forward-looking supply and demand indicators.

Like other markets in the Top 10, according to the index, the Los Angeles area markets are characterized by low vacancies, prospects for rental growth, limited new development and solid employment and household growth. On the opposite end of the scale are markets with high vacancy rates and a lackluster economic outlook.

Harvey E. Green, Encino-based president and CEO of Marcus & Millichap, says the Los Angeles area markets enjoy "intense investor demand" because the number of properties available for purchase exceeds the number available for sale and is pushing up prices to record levels.

Los Angeles moved up from 15th spot on the index last year to this year's No. 7 finish, with Orange County moving up one to reach the No. 2 spot. The Inland Empire slipped three spots "due to slowing job growth and a slight projected increase in vacancy rates," the M&M report says. But, researchers conclude the Inland Empire "remains one of the nation's top retail markets and its growth potential ranks it high on many investors' lists." The Marcus & Millichap researchers point out, too, that all markets in the Top 10 are relatively close to each other in performance and outlook.

Washington DC, ranked as the top retail market in the nation for the second consecutive year "due to its compelling demographics and reliable economic engine fueled by the public sector," according to the report.

Trailing Washington, DC and Orange County, the third place went to San Diego; Boston came in fourth; Fort Lauderdale, fifth; San Francisco, sixth; LA, seventh; West Palm Beach, eighth; Inland Empire, ninth; and Sacramento, 10th.