"The market is alive with new investment opportunities, positive net absorption, healthy asking rents, and credible national and local tenants expressing interest in expanding throughout San Diego County," says a second quarter report recently released by BRE Commercial/NAI. According to the firm's researchers, vacancy rates have declined from 5% to 4% countywide, while South San Diego County's overall vacancy level has dropped to a low of 2.5%. The mid-year statistics show that 532,717 sf of retail space was absorbed in the second quarter of 2003, with 291,268 sf of absorption occurring in the Central County submarket; 137,650 sf in South County; 60,311 sf in East County; 33,496 sf in North County Inland; and 9,992 sf in North County Coastal.
Low vacancy levels and positive net absorption have spurred on developers, as new retail properties are still rising throughout the county. "If the strong tenant demand continues throughout 2003, expect brisk absorption of the space once these new centers come online," says the BRE Commercial/NAI report. The firm's researchers say rental rates at these new developments currently range from $2 to $3 triple-net, while the average rate at existing properties countywide is $1.50 triple-net.
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