San Diego Big Box Absorption Climbs in 2018

San Diego’s big box retail market had a strong year, despite a bulk of Toys R Us product coming onto the market. According to research from CBRE, users absorbed 18 big box retail properties totaling more than 600,000 square feet last year. This was roughly a 100,000 square-foot increase in absorption over 2017. The leasing activity was particularly impressive because the Toys R Us closure bought 150,000 square feet to the market in 2018.

“Over the last couple of years, we typically have about 1 million square feet of big box retail space available, and this year was right around that same line,” Michael Peterson, a senior associate at CBRE, tells GlobeSt.com. “We did see an influx of space because of Toys R Us, but it wasn’t a surprising amount of space to see come back. We actually had stronger absorption than 2017, north of 600,000 square feet compared to 500,000 square feet in 2017.”

Currently, San Diego has a supply of 29 big box spaces totaling 884,021 square feet, just below the 1 million square foot average. However, it is likely that more supply will come online this year. “That is becoming a little more typical of retail. Recently, we saw Wal-Mart announcing big gains in retail sales at the same time that Payless announced store closures,” says Peterson. “It is different each day.”