Negative Retail Absorption in San Diego Could Be Good News for Landlords

Matt LoPiccolo

San Diego’s retail market had a rough third quarter. According to a new report from CBRE, the San Diego market had 241,000 square feet of negative retail absorption in the third quarter and asking retail rents fell $0.02 per square foot. The negative absorption was driven by a handful of large move outs concentrated in North County. While this is certainly a slip, it could turn out to be good news for landlords looking to make adjustments that will produce more favorable results in the future.

“Optically, it looks like a negative trend, but some of the retailers that haven’t renewed is actually a favorable thing for the landlord, like, for example, the Ralphs in Oceanside that decided not to renew,” Matt LoPiccolo, first VP at CBRE, tells GlobeSt.com. “The landlord of the property had been monitoring sales volumes for the last year of two to gauge tenant interest. Some of the negative absorption is going to be met favorably with landlords that are perusing better uses to have rents reset the market. This is a stat that will be favorable in 9 to 12 months.”