SAN DIEGO (KGTV) — Even though many local businesses have struggled amid the pandemic and San Diego County saw an unprecedented spike in unemployment in the second quarter, there has not been a significant jump in the number of empty retail storefronts -- at least not yet.
The vacancy rate in San Diego County ticked up slightly to 5.6 percent in the second quarter, according to an analysis by commercial real estate firm CBRE.
Vacancies tend to be a lagging indicator. Large national chains like 24 Hour Fitness and Pier 1 Imports have announced closures in recent weeks, but the businesses are still occupying their commercial spaces. 24 Hour Fitness is closing four clubs in San Diego County. Pier 1 Imports is closing all 11 of its local stores; four of those locations have already closed.
While vacancies take time, the pandemic has slowed the region’s commercial real estate market in other ways, said CBRE Associate Field Research Director Michael Combs.
New leasing activity in the retail sector dropped to nearly a 10-year low in the second quarter, down nearly 50 percent from the first three months of 2020.
“There just haven't been a lot of new deals as tenants especially in retail are waiting to see how this situation plays out,” he said.
The slowdown in new leasing activity may be a sign that companies are holding off on plans to expand operations, since new leases with larger footprints are typically signed far in advance.