Lifestyle Centers See Significant Increase In Asking Rents, New Construction Pushes Up Vacancy According to NAI Capital’s Retail Market Outlook For Los Angeles, CA
Los Angeles, CA, Tuesday, May 09, 2017– According to research provided by NAI Capital, in the first quarter of 2017 the Los Angeles retail market vacancy rate ticked up 30 basis points to 4.1% as 532,756 square feet were delivered to the market, including the largest IKEA in the United States at 470,000 square feet in the city of Burbank. Los Angeles County has 1.1 million square feet of retail space under construction. Approximately 61% of the space under construction has been taken.
The average asking rent continues to increase, up 6.3% over last year. At $2.69/SF, it is the highest seen in Los Angeles County since the peak in 2008. Lifestyle centers saw a significant increase in asking rents this quarter, jumping 38% from the prior quarter to $3.64/SF. This significant rental increase is the result of Lifestyle Center landlords, such as Rodeo Collection and Promenade on the Peninsula, increasing their asking rates for new tenants. In contrast, some traditional Malls and Power centers have been forced to lower average asking rents in light of rising vacancies.
According to Fariba Kavian, Executive Vice President with NAI Capital’s West Los Angeles office, “As some retail investors across the nation are reconsidering their portfolio concerned for the future of retail centers, those fears are far from Los Angeles retail owner’s minds. Supported by rising rental rates and continued growth in population density, large box vacancies are in demand and landlords are willing to hold out on their smaller vacancies for the right tenant at the right rental rate.”
According to the Conference Board, the Consumer Confidence Index (CCI) sharply increased in March to its highest level since December 2000. CCI is defined as the degree of optimism on the state of the economy that consumers express through their saving and spending. The unemployment rate in Los Angeles fell from 5.2% in March 2016 to 4.3% in March 2017 due to the addition of 84,300 jobs. As consumer confidence and employment continue to drive retail spending, demand will increase heading into 2017.
To access the full Los Angeles Retail Market Outlook report,
About NAI Capital
NAI Capital is the largest independently owned full service commercial real estate firm headquartered in Southern California. As one of the largest members of NAI Global, the premier managed commercial real estate service network with 400 offices and 7,000 market leaders spanning the globe, NAI Capital provides a complete range of transaction, valuation, investment, property management and consulting services. By leveraging our local expertise with our global reach, NAI Capital offers innovative, customized solutions and seamless service to owners, tenants, investors and developers throughout Southern California. NAI Capital clients have built their businesses on the power of our expanding network. We are a dynamic growing commercial real estate company. At NAI Capital we work together putting our clients first.
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To learn more, visit www.naicapital.com
About NAI Global
NAI Global is a leading global commercial real estate brokerage firm. NAI Global offices are leaders in their local markets and work in unison to provide clients with exceptional solutions to their commercial real estate needs. NAI Global has more than 400 offices strategically located throughout North America, Latin America, Europe, Africa and Asia Pacific, with over 7,000 local market professionals, managing in excess of 425 million square feet of property. Annually, NAI Global completes in excess of $20 billion in commercial real estate transactions throughout the world.
NAI Global provides a complete range of corporate and institutional real estate services, including brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain and logistics consulting and related advisory services.
To learn more, visit www.naiglobal.com.
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