Market Report: Santa Monica

Santa Monica’s retail market has undergone a slow normalization phase after a period of elevated vacancy and subdued leasing activity. Average rents have moderated slightly from $5.50 to $4.47/SF/mo, suggesting a rebalancing between tenant affordability and landlord expectations. The market remains heavily influenced by tourism and local foot traffic, particularly along Third Street Promenade and the coastal corridors.

Vacant available SF has increased from roughly 300,000 to 635,000 SF, reflecting longer lease-up timelines for larger spaces. Leasing activity remains modest but consistent, averaging 10,000-20,000 SF per quarter, while quarterly deal counts (9-10) suggest stable yet cautious tenant expansion.

Santa Monica’s fundamentals remain solid in the long term, with rent pressures easing as landlords prioritize occupancy over rate growth. Expect steady recovery supported by mixed-use development, hospitality traffic, and new concepts filling smaller footprints along Ocean Avenue and Broadway.