SAN DIEGO (KGTV) -- Retail businesses continued to fall victim to the pandemic in the first three months of 2021, pushing San Diego’s retail vacancy rate to a seven-year high.
San Diego’s retail vacancy rate rose to 6.3 percent in the first quarter, according to commercial real estate firm CBRE, which tracks 670 retail properties throughout the county.
The vacancy rate is up from 5.3 percent in the first quarter of 2020 and 4.4 percent in the same part of 2019. It’s the highest share of empty retail space since the middle of 2014.
“If you date back to coming out of the Great Recession, we had higher vacancy rates than we have right now. So this is not unprecedented,” said CBRE senior associate Michael Peterson.
Peterson said there are plenty of reasons for optimism that San Diego’s storefronts will be filled quickly. Between improving jobs numbers and stimulus funds, consumers have money on hand and an appetite to spend it.
“San Diego is a resilient market,” he said. “We have a strong consumer coming out. I don't think we're going to hover at a high vacancy rate for too long.”
Businesses are filling empty spaces at a decent clip: the rate of new leasing activity was just below the average from 2016 to 2020, CBRE reported.
However, the pandemic has reshaped the kinds of businesses now opening at shopping centers, Peterson said.
Instead of traditional retailers, there are more service-oriented businesses renting space, he said.
Among the trends: a lot of people got pets during the pandemic, so Peterson said they’ve seen growth among pet-related services like veterinarians. There has also been growth in health-related services.
“You're starting to see doctors and urgent care. Outpatient stuff, even down to Botox and medical spas are starting to fill this vacant space,” he said.
Across the country, CBRE reported that retail sales were up 28 percent in March compared to March 2020, and they were well above any point in 2019. And that’s with occupancy limits still in place in most sectors, Peterson noted.
“I think retail is in a good spot going forward, especially in San Diego,” he said.