Pacific Beach, California Retail Market Report

Market Overview & Performance

Pacific Beach, a coastal gem in San Diego, boasts a dynamic and eclectic retail scene that mirrors its vibrant and beach-centric lifestyle. The retail landscape is characterized by a diverse mix of businesses, including surf shops, clothing boutiques, restaurants, bars, and cafes. With its picturesque beachfront setting and a constant influx of tourists, Pacific Beach presents a unique opportunity for retail properties. The area’s retail market continues to thrive, with a focus on catering to both residents and the steady stream of visitors seeking the quintessential Southern California experience. While maintaining its laid-back atmosphere, Pacific Beach’s retail sector is evolving to meet changing consumer preferences and market demands, making it an attractive and promising destination for retail investments.

Rents

Average market rent for Pacific and Mission Beach is $3.12 per square foot. Spaces under 2,000 square feet on West Garnet/Mission Blvd demand closer to $4.00, Mid-Garnet $3.50, and East Garnet $3.00.

Availability

The vacancy rate is currently at 3.4%, which is 0.5% higher than six months ago. There are currently 30 properties on the market for lease. The vacancy rates are mostly due to macroeconomic conditions, including utility costs, wage increases, and inflation rates. Therefore, it is important to be in communication with your tenants about their future business plans.

Comps

On-Market Asking Rates

• Former Crunch Fitness – 1201 Garnet – 12,000 SF – asking rate is $2.25/PSF
• Former Funky Monkey – 1036 Garnet – 2,800 SF – asking $3.25/PSF
• Former IHOP – 856 Grand – 5,100 SF – asking $4.00/PSF

Recently Executed Leases

• High-Class Tattoo – 948 Garnet – 2,500 SF – $3.25 PSF
• Boba Love – 1418 Garnet – 1,000 SF – $3.50 PSF
• Wild Fork Foods – 1701 Garnet – 4,500 SF – $3.54 PSF

Interesting Facts

• Pacific Beach has implemented paid parking meters on the streets, charging
  $1.25 per hour.
• The majority of sales in 2023 have been multifamily redevelopment
  purchases, such as 4450 Lamont & 970 Turquoise.

On-Market Sales

• 3795 Mission Blvd, Mixed-Use – 4,284 SF – Asking $4,000,000 – 5.44% Cap.
• 722 Grand Ave, Firehouse Eatery – 4,500 SF – Asking $10,500,000 – 3.55% Cap

Recently Executed Sales

• 959 Turquoise St – 2,873 SF – $1,470,000 – $511/ PSF
• 4450 Lamont St – 7,589 SF – $3,150,000 – $415/ PSF
• 970 Turquoise St – 2,868 SF – $2,100,000 – $732/PSF

Alex Conley’s Current Listings

• 1537 Garnet – 957 SF – $3.75/PSF
• 1721 Garnet – 1,325 SF – $3.50/PSF

Alex Conley Team’s Recently Executed Listings

• 948 Garnet – High-Class Tattoo — 2,500 SF – $3.25 PSF
• 1001 Garnet Ave – Dave’s Hot Chicken – $4.15/ PSF
• 855 Garnet Ave – Nautical Bowls – $6.00/PSF
• 1245 Garnet Ave – Wing Stop – $4.00/PSF
• 1245 Garnet Ave – Chocolate Bash – $3.35/PSF
• 4343 Mission Blvd – Preso Tea – 1,300 SF – $4.75/PSF

Outlook on the Market

The Pacific Beach retail scene has been everchanging. There is an influx of re-tenanting to higher-end, modern concepts such as LKSD, the Mission/Garnet Food Hall, and Wild Forks Grocery. Many landlords see the value in repurposing their assets to accommodate a new wave of tenants.