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Market Report

Orange County Retail Investment Forecast

2022 Outlook

Orange County Ranks Among West Coast's Tightest Markets;
Investors React to Minuscule Pipeline

Tourism and discretionary spending poised to improve. Orange County's retail sector has proved resilient during the health crisis, having navigated convention cancellations, amusement park closures and a significant reduction of in-office operations. Entering 2022, vacancy was just 50 basis points above its pre-pandemic mark and 70 basis points below the average rate registered across the other nine major West Coast markets. Moving forward, vendors can expect an increase in retail sales as tourism recovers. Both Disney's D23 Expo and the National Association of Music Merchants convention will return to Anaheim during the second half of 2022, with theme parks expected to operate at full capacity this year. Additionally, the number of traditional office-using professionals is projected to reach a record mark, pushing the median annual household income near $100,000. Together, these demand drivers will cultivate retailer expansions at a time when inventory grows by less than 0.1 percent. Steered toward the metro's existing stock, growing vendors will support positive absorption that lowers vacancy below the metro's trailing five-year average.

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