San Jose Retail Market Report
Future Move-Ins Signal Upcoming Gains,
But Retail Sector off to Slow Start in 2022
Lingering pandemic impacts still at play. As many COVID-19 restrictions were removed earlier this year, there was optimism that it would relay into retail momentum. However, this was not the case in the opening three months of 2022, as net absorption during that period was more negative than in any of the prior five quarters. There is still a level of uncertainty by both retailers and consumers, as unexpected variants could induce the reenactment of containment measures. Another thorn in the recovery is the sluggish return of business travel, historically a major driver of foot traffic in the market. The American Hotel and Lodging Association predicted that business travel revenue in San Jose will be down more than 50 percent in 2022 relative to 2019, which equates to a $750 million loss in economic activity. San Jose's retail sector is poised to turn the corner eventually, but the return of business travelers, as well as a replenished comfort level among local consumers, are key elements.