Q1 2022 Retail Market Outlook – Los Angeles
LA County’s retail market continued to feel the drag from the post-pandemic shutdown. Vacancy, lower construction, and slack demand for bricks and mortar retail has landlords contending with retailers coming back little by little. While some of the vacant space that was quickly put on the market during the shutdown began to get occupied in the second half of 2021, the first quarter of 2022 showed retail space sat mostly vacant. Quarter over quarter, vacant retail space on the market increased by 76,313 square feet, edging up a bit the total amount of vacant space on the market to just over 17 million square feet. The retail market has a way to go toward getting occupancy back to pre-pandemic levels. Since the first quarter of 2020, the start of the pandemic, close to 2 million square feet of retail space was vacated.
With basically no change in vacancy quarter over quarter, most markets, for now, held firm on asking rent. The average asking rent in the region remined flat from the previous quarter, 4.8 percent above last year. However, a couple of markets eased rents to stimulate demand. Leasing volume compared to last year at this time showed an increase of 12.1 precent, quarter over quarter it declined 7 percent. Square footage sold dropped 48 percent from the prior quarter, up 52.4 percent from the year before. The average sales price registered $479/SF, up 26.4 percent year over year.