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IRVINE, CA-Orange County's retail sector continues to gain ground, reports Jones Lang LaSalle. Net absorption is expected to rise by year-end, along with average rents, and the short- and long-term economic outlooks for the retail sector are positive, according to the firm.

As GlobeSt.com reported in June, retail leasing activity in the county is projected to grow near term thanks to strong sales volume and high personal income, with vacancy rates expected to dip below 5% by mid-2014. David Bradley, a senior associate with JLL, told GlobeSt.com at the time that retail stores that promote a healthy lifestyle have been filling in vacancies all up and down the coast. “Healthy concepts such as juice shops and salad shops are opening locations in many coastal regions along the Southern California coast. This is a trend we will continue to see more and more of in the years to come.”

Bradley now tells GlobeSt.com that not much has changed over the past few months and that the outlook is still bright.  “You see a lot of retailers kind of kicking the tires. “I wouldn't say that there are more transactions happening than there were two or three years ago, but there's definitely more interest in the market.”

Bradley adds that tenants are being more selective and strategic about the type of real estate they're entering. “They're starting to look at where they should be, the types of co-tenants they have. You're not seeing Starbucks opening 1,000 stores in six months like they used to do.”

In addition to retail associated with Orange County's strong leisure-and-hospitality market, JLL reports that areas where retail density is expected to increase, such as the proposed 5,000 new homes at Great Park here, are likely to spur ground-up retail construction in the near term. Also, with a strong demand forecast, rents may begin to make up some lost ground over the next year, with the largest gains likely to occur in areas with top population growth such as here and in Anaheim.

“The residential factor will play a role in new commercial development,” says Bradley. “Where there are people, opportunity and disposable income, this will obviously generate builders and tenants to look at a certain trade area.”

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