It's been an up-and-down start to the year for retail in San Francisco's Bay Area.
Starting with the bad, absorption flipped to negative territory to -102,000 square feet in the first quarter, according to a market report from CBRE. That followed two consecutive positive quarters of occupancy increases.
The bulk of the negative net absorption was in the East Bay submarket (-219,000 square feet). By property type, power centers struggled the most by leaving -178,000 square feet on the market, followed by neighborhood community & strip assets, which combined for -178,000 square feet.
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That comes as supply has been surging. Completions in the first quarter surged by more than fourfold from the previous three months to reach 280,000 square feet. Submarkets leading the way in that category were the East Bay (155,000 square feet) and San Francisco & Peninsula (125,000 square feet).
"Over the past 12 months, the Bay Area has added 587,000 of new retail space to the market," CBRE wrote.
To less turbulent trends, availability was by 10 basis points to 5.7 percent in the first quarter. Overall, the CRE firm describes the vacancy trend as "healthy" in the current state of the market.
"Availability has maintained the 5% range for nearly five years, demonstrating stability of this asset class in the Bay Area," CBRE explained.
Also, average asking rates grew by two percent to $33.18 per square foot.
Sports Basement snagged the top retail lease in the Bay Area during the quarter, with its 81,000-square-foot deal in San Jose at 5353 Almaden Expy. Hobby Lobby took the next largest deal at the same location, with its 63,000 square-foot space. Coming in third and fourth place were T&T Supermarket and Osaka Marketplace, which took 55,944 square feet and 44,423 square feet in San Francisco and Pleasant Hill, respectively.
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
