Retail Absorption Spikes in SoCal, Thanks to the Inland Empire

Retail absorption is surging in Southern California. There was 1.5 million square feet of net absorption in region in the second quarter, resulting in seven-times the square footage of retail space taken off of the market over the previous quarter, according to a second quarter report from Colliers. The activity shows a swift rebound in the retail sector as businesses reopen.

The Inland Empire was largely responsible for the spike in activity. The market recorded 1.8 million square feet in positive net absorption, a sudden improvement after five straight quarters of negative net absorption. As a result, the vacancy rate in the market fell from 9.7% in the first quarter to 9% in the second quarter. However, rental rates have not followed the same growth trajectory. Asking rents are down $.30 for the quarter to $1.56 per square foot.