Greater Los Angeles Retail Closed Midyear on a Positive Note
The Los Angeles Basin retail market closed 2nd quarter on a positive note as net absorption recorded at 447,900 square feet (SF). A total of 329,700 SF was delieverd to the base with new construction completions. The Inland Empire market had the highest amount of new construction deliveries recording at 226,600 SF, with Los Angeles County following close at 66,000 SF and Orange County coming in last at 37,100 SF. Two counties recorded positive absorption; Inland Empire (410,200 SF) and Orange County (157,500 SF) while Los Angeles County recorded negative movement at -119,800 SF.
The vacancy rate for the Greater Los Angeles region decreased to 5.6%, down 10 basis points from last quarter. The vacancy rate a year ago stood at 6.3%. Orange County recorded the lowest vacancy rate at 4.4%, a decrease of 10 basis points. Los Angeles County followed, recording a vacancy of 4.8%, an increase of 10 basis points and Inland Empire recorded the highest vacancy rate at 8.4%, a decrease of 20 basis points. The weighted average asking rental rate increased to $1.99 per square foot (PSF) per month, triple net (NNN) from the previous quarter.
Asking rents were lowest in the Inland Empire at $1.44 PSF NNN and highest in Los Angeles County at $2.42 PSF NNN.
Super Regional Malls in Los Angeles County remain the most expensive space at $5.74 PSF NNN.
There is currently 893,600 SF of new retail inventory under construction in the Inland Empire market.
According to the Chapman University Economic Research press release, California consumer sentiment has decreased in the second quarter, down 10 points to 109.5. This consumer outlook decrease is believed to be the result of recent political actions of the proposed GOP medical care act and the new tax plan progress.The largest Inland Empire project currently under construction is the Renaissance Marketplace located in Rialto at 260,765 SF. Currently, there is a total of 1,794,600 SF of retail under construction in Los Angeles County. The largest project in the County is The Vineyards in Porter Ranch, consisting of 214,800 SF. Both projects are expected to be completed by mid-2018.