Greater Los Angeles Retail Ends 2017 With Positive Activity
The Los Angeles Basin retail market closed the fourth quarter on a positive note as net absorption recorded 1.5 million square feet. A total of 766,600 square feet was delivered to the base with new construction completions. The Inland Empire market had the highest number of new construction deliveries, recording 439,700 square feet, with Los Angeles County following at 214,900 square feet and Orange County recording last at 112,000 square feet. All counties recorded positive absorption: Inland Empire (813,400 square feet), Los Angeles (479,000 square feet) and Orange County (396,800 square feet).
The vacancy rate for the Greater Los Angeles region decreased to 5.1%, down 30 basis points from last quarter. The vacancy rate a year ago stood at 5.7%.
Los Angeles County recorded the lowest vacancy rate at 4.0%, a decrease of 20 basis points. Orange County followed, recording a vacancy of 4.3%, with no change from last quarter, while the Inland Empire recorded the highest vacancy rate at 7.9%, a decrease of 50 basis points.
The weighted average asking rental rate increased $0.03 from the previous quarter to $2.03 per square foot (PSF), triple net (NNN), per month. Asking rents were highest in Los Angeles County at $2.64 PSF NNN and lowest in the Inland Empire at $1.47 PSF NNN. Super regional malls in Los Angeles County remain the most expensive space at $5.32 PSF NNN.
Annual national retail and food services sales for December 2017 increased by 5.4%. According to The Conference Board, consumer confidence declined in December after reaching a 17-year high in November 2017. The decline stems from a less optimistic future outlook for business and job prospects. However, consumer assessment of current conditions remain at historically strong levels, suggesting economic growth will continue well into 2018.