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Market Report

San Diego Retail Market Report

2Q 2023

Foundation of Local Retail Demand Strengthens,
Fueling Standout Conditions in Largest Submarket

Well-located space at a premium. San Diego’s retail sector recorded the largest vacancy decline among major California markets over the past year ending in March. During this stretch, an equal level of tenant demand for single- and multi-tenant space was noted, supported by the full recovery of the local tourism sector and monthly levels of consumer foot traffic relatively comparable to pre-pandemic recordings. Moving forward, most retailers intent on expanding their existing footprint or establishing local operations will browse the metro’s existing vacant stock. Outside of a large-scale delivery in Downtown San Diego, only about 100,000 square feet is slated for completion this year, most of which was accounted for as of May. This dynamic will minimize supply-side pressure, allowing metro vacancy to hold below 5 percent for a second straight year. 

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