Greater Los Angeles Retail Ends 2016 With Mixed Results
The Los Angeles Basin retail market added 257,200 SF to the base this quarter with the 2016 construction total being 2,086,500 SF. This is on par with the amount of construction seen in 2015, which was 2,165,400 SF. There remains 1,679,600 SF of space under construction, much of which is already leased. Net absorption remained positive at 674,600 SF for the quarter and 3,643,900 SF for all of 2016. Net absorption was highest in the Inland Empire at 604,500 SF and lowest in Orange County which has 238,000 SF of negative absorption.
The vacancy rate for the Greater Los Angeles region remained unchanged from the previous quarter at 5.1%, yet is down 10 basis points from 5.2% which was reported at the end of 2015. The weighted average asking rental rate decreased over the quarter to end at $1.92, which declines in the Inland Empire bringing down the marketwide average.
Asking rents were highest in Orange County at $2.31 PSF NNN and lowest in the Inland Empire at $1.41 PSF NNN. Super Regional Malls in Los Angeles County remain the most expensive space at $5.31 PSF NNN.
According to the Chapman University Economic Research press release, California consumer sentiment deflated in the fourth quarter, down 3.2 points to 105.5. This coincides with increasing consumer anxiety over the results of the recent US presidential election.
The Los Angeles County retail market recorded positive 308,100 SF of absorption, causing vacancy to decline by 10 basis points to 4.1%.
Orange County absorption recorded negative 238,000 SF.
Inland Empire retail market activity witnessed a decrease in vacancy dropping 20 basis points to 7.6% during the fourth quarter.
Currently, there is a total of 1,061,400 SF of retail under construction in Los Angeles County. The largest property currently being built is the 470,000 SF IKEA building located in Burbank. The project is expected to be completed by mid-2017.
There is approximately 195,600 SF of retail space under construction in Orange County. The largest property currently being built is the Laguna Hills Mall, which consists of 170,000 SF and is expected to be completed by third quarter 2018.
There is currently 422,600 SF of new retail inventory under construction in the Inland Empire market. The largest project currently under construction is the community center located on the SWC of San Bernardino and Riverside Ave. in Rialto totaling 239,500 SF.