Market Reports

Leasing conditions in the Los Angeles County retail market reflect a nuanced landscape shaped by shifting consumer behaviors and economic factors. Despite challenges stemming from population declines and sluggish tourism recovery, demand for retail space has seen a modest decline, particularly in larger format stores, evidenced by a 10% decrease in new lease volume in 2023. Vacancy rates have oscillated due to significant closures of big box stores like Sears, leading to fluctuations in availability, with notable exceptions like Target’s lease of a former Sears Outlet store in El Monte. However, this lease stands out as an anomaly amid a broader trend of limited leasing activity in spaces over 25,000 SF, indicating a potential mismatch between supply and demand dynamics.

Post-pandemic shopping preferences have notably favored neighborhood centers, driving demand for retail space in suburban submarkets like Mid-Cities, Antelope Valley, and the San Gabriel Valley. This trend, fueled by consumer preference for convenience and accessibility, has spurred leasing activity from boutique fitness companies and other retailers, highlighting the resilience of neighborhood-centric retail formats. Conversely, malls and power centers are grappling with weakened demand, compounded by softer demand in westward submarkets where tech and financial firms are situated. Despite these challenges, rent growth has remained subdued, increasing by only 0.2% over the past year and trailing behind national trends, reflecting the market’s struggle to attract tenants amidst broader economic headwinds.

Below are breakdowns of submarkets found in the Greater Los Angeles area.