Retail Sales Slow, Outlook Stays Positive

For example, the sales of restaurants have slowed by 47% this year, but the median price for them has increased by 6% to $445 per square foot in the latest survey. The report compares and contrasts single-tenant and multi-tenant properties, noting that as 1031 exchange buyers have taken a less active role, single-tenant retail sales activity has fallen by 18% over the last year.

On the multi-tenant side, a gap remains between the wishes of sellers and the expectations of buyers—a situation that applies in other property sectors as well. The number of multi-tenant transactions has plunged by 73% in the county over the past 12 months, a percentage that fairly matches the dropoffs in transaction velocity across all property types, as reported by a number of research firms that track property sales nationally and worldwide. But prices for the county's multi-tenant assets "are edging higher as more high-quality assets trade," the Marcus & Millichap report points out. During the last year, the median price has risen 6% to $301 per square foot.

Despite the influences of a slowing US economy and the uncertain credit markets, the long-term outlook for Orange County has investors and developers looking ahead to a time when they can develop on the relatively small amount of land available for construction in the county. The report points out that city-owned land along AvenidaVista Hermosa in San Clemente could be the site of a new 105,000-square-foot Target store. And in Buena Park, "Investors may want to explore opportunities for retail properties near the new Metrolink station," the report says.

New development is on the horizon in Huntington Beach, too, at the Village at Bella Terra, a mixed-use project. As GlobeSt.com reported recently, DJM Capital Partners of San Jose, CA has gained approval from the City of Huntington Beach for the new development.