The Los Angeles retail markethas a lot of strengths. Asking rents are up, overall, to $33.34 persquare foot, according to a new report from JLL.However, while rents continue to rise, a sign of demand, thevacancy rate has grown from 2018 to 46% and net absorption lastyear was negative 1.2 million square feet. The vacancy rate isclimbing even as new construction activity slows, downyear-over-year, according to the report.

"America has too much retail square footage and not all of it isgood," Benjie Baker, VP at JLL, tells GlobeSt.com."That's a given. Furthermore, with the amount of data available,owners and retailers have a much more accurate read on the truevalue of a space. That is causing tremendous bifurcation in themarket between commodity retailers and experiential retailers,including entertainment concepts. This makes good real estate evenmore valuable and poor real estate less."

The market seems to becoming more bifurcated. While obsoleteretail is left vacant, driving down occupancy rates, in-demandretail is seeing significant rent increases, enough to boostoverall rental rates. "To complicate things further, as rents forgood real estate escalate, tenants reduce their footprints in orderto minimize costs and streamline operations," says Baker. "Thewheat is rapidly getting separated from the chaff as the industryforcibly evolves."