LA Retail Demand Improves by Three-Fold as Market Stabilizes
Los Angeles' retail space is seeing some notable improvement. That's headlined by net absorption, while still negative, it fell to just -236,000 square feet in the second quarter, which is down by more than triple the first quarter's -836,000 square feet, a market report from CBRE shows.
Some submarkets, including South Bay, Santa Clarita County and Antelope Valley, actually posted positive demand. Meanwhile, the negative levels were led by San Fernando Valley (-109,000 square feet) and Southeast Los Angeles (-106,000). By property type, lifestyle and malls performed the best, with their combined absorption of 67,000 square feet. Street, freestanding and other assets posted a combined -143,000 square feet.
Another positive was sales activity, which rose to $540.1 million compared with $393 million in the three months prior. The biggest buy in the second quarter was made by TIAA-CREF, with its $107.50 million acquisition of a Santa Clarita property. Buyers listed as TRC Retail and Justin Mateen followed, with $42 million and $37.3 million purchases, respectively.
Deliveries slowed down to 86,000 square feet compared with 107,000 square feet in the first quarter, while the availability rate stayed the same at 6.2 percent.
The one negative was asking rents, which dropped by four cents to $2.94 per square foot. The Outlying Los Angeles submarket experienced the lowest ask, at just $1 per square foot.
Source: GlobeSt/ALM