San Diego places third among U.S. retail markets for investment opportunities, in an annual ranking by the commercial property brokerage firm Marcus & Millichap.
The region dropped one spot from a year ago in the firm’s 2011 National Retail Report released Feb. 8, ranking 44 metro areas on factors including supply and demand, occupancy, and prospects for retail sales and job growth.
The top five markets this year are Washington, D.C., which also topped the 2010 ranking, followed by New York City, San Diego, Los Angeles and Orange County.
The report says retail property transaction velocity in San Diego will accelerate this year as low interest rates for qualified borrowers “create rare opportunities to capture properties for immediate cash flow.”
Marcus & Millichap projects the local retail vacancy rate will finish the year at 4.7 percent, among the lowest in the nation. Effective rents, with competitive incentives factored in, will increase 2.3 percent from a year ago, to $24.73 per square foot.
Developers will complete 190,000 square feet of new retail space locally, down slightly from 2010, the firm says.
— Lou Hirsh