Los Angeles Retail Market Report

Suburban retail outperforms. At 5.8 percent, vacancy in Los Angeles was nearly at an all-time high in March. This rate, however, distracts from the solid tenant demand that exists in large suburbs and centrally-located neighborhoods. Outside Downtown Los Angeles and Mid-Wilshire, collective vacancy fell 10 basis points over the past 12 months to 5.6 percent, aided by more pronounced declines in the San Gabriel Valley and Mid-Cities — areas of locally lower apartment rents. While vacancy in Greater Downtown Los Angeles is elevated in comparison to these submarkets, conditions in the core may improve. During the first quarter, the CBD noted positive multifamily absorption, and most of the 7,500 rentals underway in Los Angeles proper are located here. As more residents return to areas of higher density, tenant demand for nearby retail space should follow.