X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

For more retail coverage, click GlobeSt.com/RETAIL.

SAN DIEGO-San Diego’s retail sector outperformed the Southland this year and is among one of the strongest markets in the nation, according to a report released by Marcus & Millichap Real Estate Investment Brokerage Co. The surge has been related to the metro’s diversified and growing economy, which foresees a 2.5% jump in job growth this year. “San Diego’s robust economy and strong retail sector have caught the attention of investors, who have responded by pouring capital into retail property,” says Kent R. Williams, first vice president and regional manager of the firm’s San Diego office. “With completions of new space sharply reduced, vacancy will remain low and prices for retail properties will continue to rise.”Investors and developers remain optimistic, with new retail and multifamily projects popping up daily. Undaunted by the possibility of a downturn in the market, developers are expected to put up 1.1 million sf this year, according to the report. However, completions will be down 45% from the 2 million sf delivered in 2004. “This notion of bubble bursting is on everybody’s mind, but it is not likely to occur here,” Bill Rose, CSM and ICSC – San Diego Program Chair with Marcus & Millichap, tells Globest.com. “For retail investment property types, we think the entire county is gold.”The report predicts approximately 32,000 new jobs will be created in San Diego this year. While the technology and bioscience sectors continue to post strong growth, the leisure and hospitality sector is creating the most employment opportunities, with an increase of 5,800 positions forecast for 2005.Marcus & Millichap’s report states that with for-sale inventory likely to remain limited, prices will continue to rise. Single-tenant prices have increased 19 % over the past year to $270 per sf. Fast-food restaurants command the highest median price at $497 per sf, up $63 from one year earlier. Additionally, retail properties will appreciate as capital pours into the sector. Median prices for multi-tenant properties have increased 17% over the past 12 months to $175 per sf while cap rates have fallen 90 basis points to 7%.”I have never heard an investor say I don’t want San Diego because it’s too pricey. They look at it as a place they want to be due to the fundamentals that are in place,” Rose says.

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?

Dig Deeper

GlobeSt. NET LEASE Spring 2021Event

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

Get More Information
 

GlobeSt. NET LEASE Awards 2021Event

These awards honor the industry's most influential and 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 © 2021 ALM Media Properties, LLC. All Rights Reserved.