Finding new space or room to grow will be a challenge for San Diego County retailers, according to a report from Marcus & Millichap.
There just isn’t much out there, particularly in central San Diego County, and not much new construction is in the pipeline.
Vacancy of retail space has dipped to 3.7 percent — the lowest it’s been since late 2007, according to Marcus & Millichap.
This comes as new construction of retail space is projected to drop to 545,000 square feet through the end of the year, down from 663,000 square feet in 2017.
“A minimal construction pipeline beyond 2018 suggests a prolonged period of tight vacancy should be on the horizon, prompting the average asking rent to return to the previous cycle’s peak,” according to the report.
Projections are the new retail space that does come on line through the end of the year will be for smaller spaces.
“Deliveries larger than 100,000 square feet are nonexistent in 2018,” Marcus & Millichap reported. While the scarcity of space might be a challenge for retailers, it’s good news for property owners.
“Persistent job creation coupled with tight vacancy throughout the county has local and Southern California investors eager to acquire San Diego retail properties,” Marcus & Millichap said.