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Market Report

San Diego Retail Investment Forecast

2022 Outlook

Bevy of Demand Drivers Hasten San Diego's Recovery;
Buyer Pool Expansion Underway in North County

Vacancy compresses for the first time in five years. Positive absorption returned to San Diego's retail sector last year, as did tourism, with summer visitor volumes nearly matching the tally recorded in 2019. These improvements signal the onset of a larger retail recovery that is poised to gain steam this year, thanks to a collection of additional demand drivers. Entering 2022, the metro represented one of the tightest multifamily markets in the nation. Out-of-reach home prices are poised to maintain this standing moving forward, benefiting retailers in submarkets with high concentrations of apartments. Expectations for diverse job creation are also brightening the retail outlook. The projected near-term increase in life science and tech positions will lift the metro's median household income, while an overall boost in hiring supports a strong rate of household formation. Retailers motivated to expand will sift through the county's existing available stock, as apart from 300,000 square feet at the Campus at Horton Plaza in Downtown San Diego, projects slated for delivery this year are largely pre-leased.

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