2010 ended with stronger than expected retail sales during the holiday shopping season, giving retailers reason for a more hopeful outlook going forward.
Orange County has nearly 500 retail centers that count a total of 68,671,383 square feet.
Confidence in the retail market is increasing, with much of the industry concluding that that the market has hit bottom and the probability of another downturn is unlikely.
Retailers remain cautious, however, and it shows in the vacancy rate for shop space in the county, which increased in the fourth quarter. That took the overall vacancy rate to 13%.
The increase in vacancies came despite a 1% drop in average asking lease rates from the prior quarter, from $2.51 to $2.50.
The mixed indicators have not gotten in the way of what seems to be an ongoing recovery at the high end of the market. Class A retail properties likely are trading at prices that are getting close to the peak of the market in 2006 and 2007. Lower-tier properties still are further off the mark.
Also helping the retail market are signs of a return to health among local banks, many of which recently have seen significant growth amid signs of a broader economic recovery.
Consumer credit is expected to grow slightly this year as individuals gradually regain confidence and banks continue to stabilize and increase lending.
The improvements have led to more activity than a year ago, but the recovery likely will be slow as retailers and landlords continue to be cautiously optimistic.
Bonwell is an associate in the Anaheim office of CB Richard Ellis. Data and analysis provided by CBRE Research.
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