Orange County retail vacancy in the fourth quarter hit its lowest rate since before the recession, dropping from 4% quarter-over-quarter and concluding 2016 at 3.7%.
The retail market continued to tighten, with quality spaces leasing quickly at high asking lease rates as class C properties remained vacant. Orange County’s small but diverse market has created a home for luxury goods, discount retailers, and everything in between driving demand for retail space higher than ever, with every major store and restaurant actively looking for space.
High median incomes and strong tourism are a big draw for retailers, but expansions are stalled due to constrictions in available supply. Tenants are all eyeing the same space, so the landlord’s market endures. Retail professionals are optimistic that a potential slowdown would offer a necessary change that could open up desirable space and offer rate relief so that active tenants can have more opportunities to be a part of the diverse market.
—Analysis provided by CBRE Research
