Greater L.A. Vacancy Rates Continue to Grow
As the economic impact of COVID-19 continued to unfold in the second quarter, the Los Angeles Basin retail market recorded negative market activity for the fourth consecutive quarter. Vacancy increased by 30 basis points, recording at 6.2%. An additional 400,300 square feet of new construction was added to the inventory base, with Inland Empire recording the majority at 321,400 square feet. Los Angeles County followed at 78,900 square feet, while Orange County recorded no new deliveries.
All three counties recorded negative tenant movement with Orange County recording the most move-outs totaling negative 472,600 square feet of net absorption. Inland Empire followed closely at negative 467,1000 square feet, with Los Angeles recording the least movement at negative 165,200 square feet.
The vacancy rate for the Greater L.A. region increased 30 basis points to 6.2%. This is the widest increase recorded for vacancy within the past three years. Los Angeles (5.0%) and Orange County (4.7%) recorded the lowest vacancy rates, while Inland Empire recorded the highest vacancy rate at 9.4%.
Despite tenant movement continuing to be in the negative, the overall weighted average asking rental rate increased by $0.02 from the previous quarter to $2.23 per square foot (PSF) triple net (NNN) per month. Asking rents were highest in Los Angeles County at $2.62 PSF NNN and lowest in the Inland Empire at $1.84 PSF NNN. Super regional malls in Los Angeles County remain the most expensive space at $4.51 PSF NNN.
National retail and food services sales for May decreased by 6.1% compared to one year ago. Since the arrival of COVID-19 and following a state-wide shutdown, California consumer sentiment plunged 33.8%. This rapid drop in a short amount of time is new historical territory.Subscribe