the sign of a Profitable Property

Market Report: Santa Monica

SANTA MONICA

Downtown Santa Monica, Mid-City Santa Monica, North of Montana, Ocean Park, Pico, Sunset Park, and Wilshire Montana

Rent Rate

Leasing Activity SF

Vacant Available SF

SOURCE: CoStar 

  • Q4 - 2021
  • Q4 - 2022
  • Q4 - 2023

Leasing Market Overview

MEASURING Q4 2023

Santa Monica’s retail sector grapples with several challenges, notably a decline in tourist numbers compared to pre-pandemic levels and a reduced daytime working population due to the rise of hybrid work arrangements. The targeting of luxury stores by criminal activity, particularly around 3rd Street Promenade, adds to the difficulties faced by the area.

Resultantly, the annual net absorption for retail properties in Santa Monica has been negative for the past six years, with projections suggesting a continuation of this trend into 2023. The vacancy rate, on an upward trajectory since 2016 when Santa Monica’s retail sector was among the tightest in the metro, currently stands at 13.2%, signaling potential higher vacancies in the near term as move-outs may contribute to this figure.

Leasing activity has decelerated, with some tenants downsizing their footprint. On a positive note, strip centers have demonstrated resilience in the past two years, witnessing a decline in the vacancy rate from 12.2% to 6.1%. Given Santa Monica’s mature retail landscape, strip centers often attract tenants who traditionally occupy smaller spaces in power centers, as the submarket lacks power centers in its retail infrastructure.

SNAPSHOT OF LEASES SIGNED

No. Signed Date Start Date Address SF Leased Rent/SF/Mo Months on Market Leasing Rep Company
No. Signed Date Start Date Address SF Leased Rent/SF/Mo Months on Market Leasing Rep Company
1 Dec-23 Jan-24 1541-1551 Ocean Ave 7,200 8.00 14 Ensemble Real Estate Solutions
2 Dec-23 Jan-24 701-715 Pico Blvd 854 3.51 3 WESTMAC Commercial Brokerage
3 Dec-23 Jan-24 701-715 Montana Ave 1,475 7.00 8 Thirty Three Group
4 Nov-23 Dec-23 2415-2449 Main St 3,463 4.50 7 Industry Partners
5 Nov-23 Dec-23 3001 Wilshire Blvd 1,962 6.00 27 Kennedy-Wilson Properties, Ltd.
6 Nov-23 Dec-23 3015-3021 Ocean Park Blvd 2,789 4.50 8 Avison Young
7 Nov-23 Dec-23 602-616 Santa Monica Blvd 1,520 4.93 12 PAR Commercial Brokerage
8 Oct-23 Nov-23 2621 Pico Blvd 930 5.16 3 Danmour & Associates Management
9 Oct-23 Nov-23 1217-1231 Wilshire Blvd 1,200 5.25 14 PAR Commercial Brokerage
10 Oct-23 Nov-23 1511 Montana Ave 1,215 7.95 12 Dembo Realty

SOURCE: CoStar 

Brokering Success

illi Commercial Real Estate sits down with accomplished broker, Xan Saks, to discuss a leasing deal between his client, Aldi, a supermarket chain, and illi-represented Canyon Center of Santa Clarita.

This interview delves into the intricacies of the deal, Aldi’s unique requirements, and the triumphant opening day of the store. It’s a compelling narrative of teamwork and success in the world of commercial real estate, showcasing remarkable achievements obtainable with collaboration.

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