The Forum shopping center in Carlsbad has several new tenants indicative of what has been a remarkable recovery for San Diego County’s retail sector.
Ward Kampf, president of Northwood Retail that owns The Forum, characterized San Diego County as “one of the strongest retail markets” in the nation.
Kampf’s observations track what the commercial real estate brokerage CBRE reported.
Michael Peterson, a vice president of CBRE in San Diego, said the retail sector has made “a pretty impressive” comeback since the worst of the COVID-19 pandemic. “The story around San Diego is really positive,” said Peterson, who specializes in retail.
“During the heart of the pandemic, we were in the double digit vacancy rate. San Diego typically hovers are around 4% to 5%,” Peterson said.
By the end of the first quarter of 2022, the vacancy rate for retail space in San Diego County was back to those typical numbers at 5.5%, according to CBRE.
That was the lowest level since the first quarter of 2020.
“Your North County coastal – Carlsbad and Encinitas – is doing very well. UTC is always one of the top markets in San Diego that really didn’t feel very much pain during COVID,” Peterson said.
At the same time, space that had been used by big box stores is being snapped up, especially by fitness-related businesses.
“You’re seeing gym uses pretty active right now,” Peterson said. “You’re seeing retailers understand and start flocking to backfill spaces they don’t think they’re going to see again.”
He said grocery stores also are among the more active retailers in San Diego County.
“You’re seeing the grocery sector expanding with a lot of fervor right now,” Peterson said. “We’re seeing grocers enter the market and aggressively expanding.”
Kampf said that a resurgence of tourism is helping.
“Tourism is coming back in a big way. That’s something I can’t emphasize enough,” Kampf said.
The Forum is an example of one of the strong retail centers areas where property owners are investing to upgrade their property and improve their tenant mix.
“That’s always been a major spot. It has the Apple Store in there,” Peterson said. “It’s going to continue to be positive.”
New tenants at The Forum include gorjana, a jewelry brand that leased a 1,635-square-foot store; a company that sells outdoor products from coolers to backpacks, Allbirds, a clothing and footwear brand; Warby Parker, a retailer of prescription glasses, contact lenses and sunglasses; and Jay Bird’s Chicken, a restaurant the specializes in fried chicken.
Northwood plans to make a number of improvements to the center, starting this summer, although Kampf said that details are still being worked out.
“We’re well on our way to kind of building the foundation to take it to the next level,” Kampf said. “One of the things we’re really focused on is upgrading and elevating the food offerings.
The 265,000-square-foot shopping center was built in 2004 by Thomas Enterprises.
Kampf said that North County “is one of the most underserved trade areas in the state of California.”
“Between Encinitas up the coast to Rancho Santa Fe to Leucadia, it’s all just kind of filling in,” Kampf said.
Peterson attributed the strong retail recovery to the ongoing growth in bio-tech and life science companies, which come with high-paying jobs.
“We’re not just a military town anymore,” Peterson said.
Kampf said there is some concern that inflation, rising interest rates, and the war in Ukraine could affect the ongoing retail recovery, but he expects that stronger retailers with specific markets will be able to withstand those pressures.