Just 6 percent of Orange County’s retail space was empty in the fourth quarter – almost half the national vacancy rate of 11 percent, says commercial real estate trackers at Reis Inc.
Orange County’s retail vacancy rate was down from 6.4 percent in the third quarter and 6.6 percent at the end of 2010.
Orange County tied with San Jose for the fifth fewest vacancies among the nation’s largest markets, by Reis math. San Francisco was the U.S. best, with just 3.7 percent vacancy; Fairfield Co. in Connecticut followed at 4.4 percent; then came Long Island, N.Y. at 5.1 percent; and Northern New Jersey at 5.8 percent. (Worst? Dayton, Ohio, at 17.1 percent!)
Retailers pay up for Orange County. The fourth quarter’s average retail rent in the county — $30.58 a square foot vs. $18.98 in big markets nationwide – was up 0.8 percent in a year. Reis said big U.S. markets saw a 0.1 percent rent drop.
Hanley Investment Group Real Estate Advisors in Irvine sees growing interest in retail properties.
Edward Hanley: “Just a few weeks into the new year, Hanley Investment Group already has a combined total in excess of $200 million in escrow and listings, plus a bevy of buyer requirements to fill. If January’s volume of activity is any indication to how the rest of the year will go, we know it is going to be a great year! As a side note, it is going to be interesting to see how the market reacts to the results of the presidential elections in November but we are not getting the sense investors are on the sidelines waiting.”
Adds Hanley’s William Asher: “We expect that the demand for multi-tenant retail with upside potential will continue to remain very steady. There is still a great deal of pent up demand and capital in the market pursing value-add assets for the opportunity to chase higher yields through repositioning and the lease up of excess vacancy.”