Market Report: San Fernando Valley

The San Fernando Valley retail submarket maintains a combined vacancy rate of 5.3%, showcasing a marginal decrease of 0.1% from the preceding year. Noteworthy is the positive absorption of 45,300 SF, coupled with net deliveries of 6,600 SF, which collectively have spurred a rental uptick of 2.0% over the past 12 months, with current rates averaging at $30.50/SF. Within this landscape, various retail segments exhibit distinct vacancy dynamics, with general retail buildings experiencing a vacancy rate of 4.2%, malls at 1.3%, power centers remaining fully occupied, and strip centers registering a 3.8% vacancy rate. Rent variations persist across asset classes, ranging between $29.50/SF and $34.50/SF, accompanied by diverse growth rates spanning from 2.6% to -0.6%.

Across the submarket, particularly in the Western region, vacancy stands at 5.0%, reflecting recent increases driven by notable vacancies in larger spaces. Despite these localized challenges, rental rates exhibit growth surpassing the metro average over the past year, presenting opportunities for potential lessees. While construction activity remains limited, ongoing developments such as the Vineyards at Porter Ranch, featuring anchor tenants like Whole Foods and AMC Theaters, contribute to the area’s evolving retail landscape. Sales activity has moderated in response to tightening capital market conditions, influenced by fluctuating interest rates, prompting stakeholders to navigate with a strategic lens towards leasing opportunities amidst evolving market dynamics.