The shopping slice of Grubb & Ellis’ 2009 forecast for commercial real estate …
Consumer spending hit a 28-year low in 2008 with retailers in the crosshairs of the downturn. Grocery store-anchored centers in mature trade areas will hold their ground in 2009, while centers on the urban fringe, where housing construction has stalled will suffer. Retailers will be even more conservative with their expansion plans in 2009, with more store closings and fewer openings. Expect higher vacancies and softer rental rates by year-end.
“Value retailers are garnering the majority of consumers’ dollars in this challenging economic climate,” said Bach. “Even the luxury retailers, which are usually immune to downturns, are feeling the pain.”
According to Grubb & Ellis’ Investment Opportunity Monitor, no retail market will escape the effects of the recession entirely, but some offer more protection due to factors such as strong population growth, a high median income and/or limited land for further development. Los Angeles topped the list for retail investment followed by Washington, D.C. California had an additional three cities in the top 10 with Orange County (No. 6), San Francisco (No. 7) and San Diego (No. 9). Texas appeared three times with Houston (No. 3), Dallas (No. 4) and Austin, Texas (No. 8). Also making the list were Atlanta (No. 5) and Portland, Ore. (No. 10).
Here’s Grubb’s top 10 markets for 2009-2013 (score is how markets were ranked from 0 to 100 against 17 property, economic and demographic variables) …
- Los Angeles County 73.8
- Washington, D.C 72.7
- Houston 69.7
- Dallas 66.0
- Atlanta 63.9
- Orange County 61.2
- San Francisco 61.1
- Austin 59.2
- San Diego 57.5
- Portland, Ore. 56.1
More from OC Retail:
- The Block to get discount department store
- KB Toys going out of business
- Forever 21 to move into O.C. Mervyn’s store
- Kohl’s to move into 3 O.C. Mervyn’s stores
- Quiksilver to close 25 stores
- Office Depot plans to close 112 stores
- 1,000-plus store closures expected after Christmas
- Another big store at The Block closes
- Surf shop at The Block closes
- Clothing retailer to close as many as 100 more stores
- How many O.C. Mervyn’s workers will lose their jobs?
- Bankrupt retailer starts liquidation sale for O.C. store
- $35 movie ticket may be coming to O.C.
- Do store-closing sales offer the best deals?
For more from OC Retail, see list of links on right-hand side of this blog.
Looks like G&E overlooked the fact that the HELOC ATM machines have now closed in OC.
Too bad California ranks near last as a business friendly state. Taxes on anything and everything. That’s why businesses are leaving the state in droves. Now CA want to raise taxes by another $14 Billion. Then they still have another $26 Billion deficit to deal with. Ouch!
Nice job including a pic of a mall in Chino Hills or as Orange County residents call the 909.
Well, it might be the 6th best market for mall owners, but I wouldn’t start celebrating yet. The sky hasn’t fallen yet and although I can’t predict if it will, I am pretty confident that the ceiling is going to be pretty low. Keep costs down and figure out how to survive and maybe thrive over the next 24-36 months.
I really can’t see OC remaining #6 overall. How can it. Those that can afford the high OC lifestyle in the High Rent areas are probably fine, but what about the rest of the population. There are many in Corona del Mar driving BMWs and wearing Douchebag shirts and Jeans with Shiney Mudflap Pockets, AND RENT THERE.
I believe that given the scenario we have where MOST of these Douchebags are living on credit, the ONLY outcome available even in Sunny OC. Its a total Consumer Based Market that cannot be sustained any longer.
Read this:
http://www.financialsense.com/editorials/quinn/2009/0120.html