San Diego remains an attractive but highly constrained retail development market. Demand from established brands, emerging concepts, service users and food and beverage operators continues to be strong, according to NewMark Merrill Companies.
Barret Bradley, vice president of acquisitions and development at NewMark Merrill, told GlobeSt.com that at the same time, continued residential growth is creating new demand in expanding submarkets like Otay Mesa, while reinforcing the need for quality retail in more established infill trade areas.
"The challenge is that there are very few easy sites left, so successful retail development requires discipline, creativity, and close coordination with the right tenant partners," Bradley told GlobeSt.com.
"We think the best opportunities will come from identifying underserved pockets of demand and thoughtfully delivering projects that fit both the community and the operators."
One of those areas might be the Otay Mesa neighborhood, where the San Diego division of retail shopping center owner and developer NewMark Merrill Companies acquired a 2.5-acre parcel at the northeast corner of Ocean View Hills Parkway and Otay Mesa Road.
The site is fully leased to three nationally recognized tenants: Wendy's, Dutch Bros Coffee and Quick Quack Car Wash. All of which are scheduled to open in early 2027.
The Otay Mesa submarket has undergone a significant transformation, adding more than 1,200 new households within one mile since 2010—a 63% increase—while median household incomes have reached $123,358—well above the national median.
The area's development pipeline shows more than 6,000 new residential units planned or recently delivered in the surrounding corridor, signaling continued long-term confidence in the submarket.
The area is near the Otay Mesa Port of Entry, one of the busiest commercial land border crossings in the US and the continued buildout and densification of the surrounding Ocean View Hills residential community.
NewMark Merrill executed the project from entitlements and permitting through leasing, financing and site development. Radar Capital Partners financed the construction financing.
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