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Larger-Scale Leasing, Lack of Supply Pressure Position Market for More Stable Conditions
Near-term vacancy movement modest. As of June, San Diego had yet to match the turnaround in net absorption seen among its Southern California counterparts. Still, the metro entered the second half of this year with the third-lowest vacancy rate among major West Coast retail markets. With a group of noteworthy lease commitments executed during the first half and the metro’s construction pipeline scant, supply and demand are poised to align in the near term. Bass Pro Shops’ commitment to nearly 150,000 square feet at Grossmont Center in La Mesa and Whole Foods’ backfilling of a former Best Buy in suburban San Diego highlight recent lease executions of 20,000 square feet or more, reflecting national brands’ interest in San Diego.