SAN FRANCISCO–The Bay Area may have finally bumped into a retail ceiling, after four straight quarters of positive net absorption. Overall occupancy leveled off at the end of the second quarter at 97.08% occupancy, a slight tick down from the all-time high of 97.34% achieved in the prior quarter, according to John Cumbelich & Associates' of the Bay Area's flagship power center inventory quarterly survey.

In addition to absorption in the overall market flattening out during the second quarter, each of the San Francisco Bay Area's four submarkets recorded minor pullbacks in occupancy during the quarter. But these increases in vacancy were very small, as the East Bay, Peninsula and North Bay markets each had vacancy gains of 12,000 to 15,000 square feet, which amounted to less than half of 1% in change. The South Bay market was virtually unchanged, with a mere 2,000 square feet in net new vacancy.

Perhaps a more telling fact than the market's robust 97.08% occupancy rate was the addition of a sixth power center to the list of 100% occupied assets. The final vacancy at the Federal Realty's 453,500-square-foot East Bay Bridge center was absorbed during the second quarter, thus becoming the third largest fully occupied power center in Northern California, trailing only Bridgepointe and Santa Rosa Marketplace. These six centers alone total 2.47 million square feet of fully occupied flagship retail space, or 20% of the entire inventory of leased space.