Orange County’s retail market has become increasingly competitive due to a significant lack of available space, according to JLL’s quarterly retail report. In the first three months of 2025, retail availability dropped to just 3.8%, only slightly above the historic low of 3.5% recorded in the fourth quarter of 2007. While recent closures of big-box stores like 99 Cents Only have opened up some opportunities, the pace of retail space demolitions continues to surpass new construction and much of the obsolete inventory is being repurposed for other uses.
Matt Hammond, principal at Coreland Companies, told GlobeSt.com that the limited new supply has benefited existing retail properties, especially in B and C centers. “Specifically, in the Orange County market, there is tremendous opportunity for value-add ownership groups that can invest,” he said. Hammond pointed to former Big Lots and 99 Cents Only centers, where new tenants such as Sprouts and Amazon Fresh are driving significant repositioning efforts and tenancy upgrades. He added, “At every scale, well-located centers are capitalizing on the opportunity. For example, an older 85,000-square-foot neighborhood center in an Orange County suburb recently underwent a full remodel. The remodel was barely underway when a high-end pet hospital took the anchor space and re-energized leasing efforts throughout. The center is 100% leased with rents that exceed market value.”
JLL’s report indicates that the scarcity of retail space is likely to persist, as new development remains minimal. As of the first quarter of 2025, only 180,000 square feet of retail space—just 0.1% of the existing inventory—was under construction. Dan Tyner, managing director at JLL, told GlobeSt.com that the Orange County and broader Southern California retail markets are performing well in 2025. “With limited new construction, steady rent growth, and historically low vacancy rates, existing retail centers are in high demand, largely due to their stable and robust performance,” he said. He added that grocery-anchored retail is particularly attractive to investors, as grocery stores have historically outperformed other retail assets. The region’s strong fundamentals and solid demographics continue to benefit Orange County retail properties.
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JLL Managing Director Shauna Mattis told GlobeSt.com that developers are actively repurposing obsolete retail spaces, which has reduced the county’s total retail inventory by more than 1.4 million square feet over the past five years. “Market experts predict elevated rent growth will persist throughout 2025 as retailers compete for limited space in this increasingly constrained market. These unprecedented supply constraints continue to reshape Orange County’s retail landscape, creating both challenges and strategic opportunities for tenants and landlords alike,” she said.
Matthew Mousavi, senior managing principal and co-head of national net lease at SRS Real Estate Partners, described the current “healthy churn” in the market as a necessary “weeding out” of struggling or outdated brands. He told GlobeSt.com, “This vacant retail space is being hotly contested by other retailers and concepts eagerly seeking to expand in Orange County. We expect retail space to be in continued high demand and in tight supply for the foreseeable future.”
A notable trend is the influx of Los Angeles-based concepts entering Orange County, a movement that began at the end of the pandemic and has only gained momentum. Rob Ury, partner at Beta Agency, noted that the acclaimed Italian restaurant Ospi recently opened on 17th Street in Costa Mesa, expanding from its original Venice location. Erewhon Market is reportedly in negotiations for a property on the same street, after several attempts to secure a site over the past year. Sushi restaurateur The Sugarfish Group is scouting Orange County for locations for its sister concepts, including HiHo, Uovo and KazuNori. Several other full-service restaurants from Los Angeles are also eyeing the Newport Beach and Costa Mesa submarkets.
Out-of-state brands are also targeting Orange County for expansion. Austin-based Uchi has secured its first Orange County location on Pacific Coast Highway in Newport Beach, set to open later this year. Bacio di Latte, already present at Fashion Island and The Spectrum, recently signed a lease at Westcliff Plaza in Newport Beach. Miami-based Pura Vida is rumored to be searching for sites, particularly in the county’s affluent coastal areas.
The fitness and wellness sector continues to grow as well. CorePower Yoga is opening a new 6,000-square-foot studio in Costa Mesa’s Mesa Verde neighborhood. Sequel Brands, a new multi-brand parent company, recently opened its headquarters in Irvine and is seeking locations for several concepts, including Pilates Addiction, beem Light Sauna, and iFlex Stretch Studios. Solidcore, which has multiple studios in Los Angeles and one in La Jolla, is actively negotiating for spaces in Orange County. Pause Studio debuted its first county location in Newport Beach last October, while Next Health recently signed a lease at Los Olivos Marketplace in Irvine.
Despite several years of challenging macroeconomic conditions that have slowed new retail development, Orange County is beginning to see an uptick in new projects. Almquist completed construction on River Street Marketplace in San Juan Capistrano late last year and is planning a grand opening celebration this summer. The same developers are marketing The Canopy, anchored by T&T Market, which will be the only shopping center within Irvine’s Great Park master-planned community. Local developer Burnham-Ward is negotiating leases for its 120,000-square-foot Dana Point Harbor redevelopment and has at least two other projects underway in the county. The Irvine Company is reinvesting in The Marketplace, adding nearly 1,300 new apartments on the Irvine side of the power center, along with a new restaurant GLA that will include a Mendocino Farms location.
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