Market Report: Santa Monica

Santa Monica’s retail market continues to command premium rents, with asking prices averaging $5.51 per square foot. Despite these high rates, vacancy has increased to 556,194 square feet, translating to a 10.8% vacancy rate. Leasing activity, while slower than in previous quarters, is still concentrated in smaller retail spaces, particularly among luxury and high-end retailers. Larger retail units are taking longer to lease, reflecting a cautious approach from tenants at the higher price points. Investors should remain confident in the long-term strength of this submarket but may need to consider offering concessions for larger spaces. Tenants have the opportunity to secure prime locations with potentially favorable lease terms due to the current level of availability.