Orange County, CA: 2015 Top Retail Markets

Orange County, CA | 2015 Top #CRE Markets to Watch: Retail

Sperry Van Ness International Corporation’s (SVNIC) 2015 Top Markets to Watch Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2015. Today we are delving into the 2015 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2015 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.

Top Retail Market to Watch: Orange County, CA

Orange County, CA: 2015 Top Retail MarketsThe retail vacancy rate in Orange County fell below 5% in 2014, down more than 200 basis points over the last two years. Rents have moved in kind, rising 8.1% over the year, according to Chandan Economics. Supply has been restrained but will spike in 2015 as large projects come online. The market is expected to absorb the new space easily, supported by the area’s strong underlying economic and consumer spending trends. In many areas of Orange County, retail sales are back to prerecession levels, at least when measured by sales tax receipts.

Supported by a median household annual income exceeding $75,000, developers are stepping up to provide opportunities for retailers to cash in. Institutional retail property owners are pouring money into remodeling and updating Orange County malls, including South Coast Plaza, which generated $1.6 billion in sales in 2014. The Brea Mall completed its major facelift in 2014, and others, including Main Place in Santa Ana and the Laguna Hills Mall, are soon to receive major remodels as well. In the small- and mid-cap segments of the market, grocery-anchored shopping centers in Orange County have seen an impressive run of 5 straight years of positive net absorption. Developers are also turning to downtown Anaheim and downtown Santa Ana for mixed-use infill opportunities.

To read more on Orange County and other top retail markets, download the full version of the 2015 Top Retail Markets to Watch report here.


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