Retail sales hit a high note at the end of 2011.
Final December sales data have not been released, but sentiment regarding the recent holiday shopping season was optimistic. Retail purchases from September through November 2011—which include “Black Friday” sales—increased 7.4% from the same period a year earlier, according to the U.S. Commerce Department.
The National Retail Federation initially projected a 2.8% sales increase for the holidays nationally, but the trade group revised its outlook upward days before Christmas to 3.8%, for a projection of a record $469.1 billion in total spending.
The projected increase would top the 10-year average of 2.6%, although it’s short the 5.2% bump in 2010.
The overall OC vacancy rate for retail space increased in the fourth quarter to 5.6% from 4.5% a year earlier.
The North OC submarket had the lowest vacancy rate at 4.8%. Vacancy levels in the Central Coast and South OC finished the period at 5.7%. Central OC saw a 5.9% rate, while West OC stood at 6% at the end of the year.
The fourth quarter saw a drop in occupancies overall, with 375,007 square feet of negative net absorption for the period, which brought the full-year total 752,028 square feet of negative net absorption.
The bulk of the fourth quarter’s negative absorption was seen in the Central Coast submarket, which recorded 201,745 square feet of negative net absorption this quarter, with 118,000 square feet of the total at Von Karman Plaza.
Rates Down
The average asking lease rate dropped by 4 cents to $2.35 per square foot in the fourth quarter. West OC had the widest range of lease rates, from $1 per square foot to a high $6.50 per square foot, resulting in an average asking rent of $2.22 per square foot.
Construction of new retail centers in OC remains on hold, as it has been since the fourth quarter of 2008. Pacific City, which is a specialty center located in Huntington Beach, halted construction of the 191,000-square-foot center in the beginning of 2010.
Although there is minor work occurring at the center, construction will not likely restart until the end of the year. Renovation work, however, has begun at Edinger Plaza in Huntington Beach. This 149,000-square-foot community center is expected to host a grand reopening in fall 2012.
Analysis provided by CBRE Research.
