LOS ANGELES, July 1, 2008 — The extended outlook for Los Angeles’ retail market remains bright, though moderating economic conditions and the local housing downturn will ease tenant demand for space in the near term, according to a second-quarter Retail Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm. The metro’s retail supply is expanding, and builders are also targeting the redevelopment of older shopping centers and malls due to ongoing land constraints.
“Los Angeles’ retail investment market will remain healthy this year,” says Scott Lamontagne, regional manager of the Los Angeles office of Marcus & Millichap. “A renewed lender focus on tenant quality will likely lure equity-rich local buyers to assets leased to national tenants.”
Following are some of the most significant aspects of the Los Angeles Retail Research Report:
Builders are slated to deliver 3.7 million square feet of retail space this year, up from 3.4 million square feet in 2007.
Vacancy is forecast to end the year at 8.1 percent.
Asking rents are expected to gain 2.8 percent to $30.42 per square foot in 2008.
Effective rents will increase 2.1 percent to $27.73 per square foot.
Los Angeles’ educational and health services and leisure and hospitality sectors have accounted for the most new jobs during the past 12 months, increasing by 11,000 and 8,000 positions, respectively.
For a copy of the complete Los Angeles Retail Research Report, as well as reports on other markets nationwide, visit our website at www.MarcusMillichap.com.
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