LOS ANGELES-Despite sliding one place in the annual rankings compiled by Marcus & Millichap, the local retail market has weathered the economic downturn nicely and is poised to do even better as the economy improves, according to the latest M&M rankings.The Marcus & Millichap National Retail Index ranks Los Angeles eighth this year among the 40 markets surveyed nationwide, down from seventh last year, but the research report accompanying the index says that economic recovery “will serve as additional fuel to Los Angeles’ already hot retail market and keep property prices on the rise in 2004.”Although Los Angeles ranks eighth in the index, its vacancy rate is the third-lowest in the survey universe. The index is a snapshot analysis that ranks 40 retail markets based on a series of 12-month forward-looking supply and demand indicators, one of which is vacancy.Retail sales grew by 3.1% in 2003 as consumers “largely ignored the fact that the county lost jobs,” says Lane M. Schwartz, regional manager of Marcus & Millichap’s Los Angeles office. He notes that the average revenue per sf has increased by more than 5% for investors who bought retail properties in early 2003. Orange County ranks first in this year’s retail index. It edges out Washington, DC, which held the title for the previous two years.Marcus & Millichap bases its outlook for Los Angeles on a series of factors, including a forecast that the county will gain 48,000 jobs this year. It expects national tenants, including discount retailers, to continue expanding in the county during the next year, accounting for most of the nearly three million sf of new retail space expected in the county this year. That figure will be down from 3.9 million sf last year. Vacancies are expected to decline by 0.6% during 2004, to 4.5%. At the same time, average asking rates for retail space are expected to rise by 4.7% to reach $24.24 per sf per year.The M&M report forecasts that shopping center prices will increase by 10% to $149 per sf. It also states that single-tenant properties will grow by 11% to $210 per sf.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

GlobeSt Net Lease Spring 2024Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.