Market Activity Slows During Mid-Year
Although the Los Angeles Basin retail market closed the second quarter with positive absorption, market fundamentals showed signs of market activity slowing. Tenant demand remained positive as absorption recorded 424,500 for the Los Angeles Basin, which is minimal for the entire basin. There was an additional 826,500 square feet added to the inventory base as new construction delivered to the market. The Los Angeles market had the highest amount of new construction deliveries, recording 509,200 square feet, with Inland Empire following recording 267,100 square feet and Orange County recording the lowest at 50,200 square feet.
The vacancy rate for the Greater Los Angeles region remained at 5.3% in the retail market. Vacancy changes have been minimal on a year-to-year basis. Despite there being a slowdown in tenant movement, the weighted average asking rental rate is continuing to increase while climbing $0.03 from the previous quarter to $2.14 per square foot (PSF) triple net (NNN), per month.