Q4 Orange County Retail Market Report
Market Overview
Orange County’s shopping centers, restaurants, and regional malls benefit from a high-income consumer base, a thriving tourism industry, and an expanding economy. Walt Disney Company is the largest employer in the market, with over 35,000 local workers. The University of California, Irvine (UCI) is the second-largest employer, with over 25,000 employees. Retail space availability in Orange County is at a decade-plus low, standing at just 4.2% as of Q4 2023. The trend of repurposing vacant retail space, especially department stores at older malls, for higher and better use, including housing, is likely to continue.
Private buyers have historically driven the majority of investment in Orange County, accounting for nearly 70% of acquisition volume.
Market Performance
Rental rates for retail space in Orange County have risen by 1.9% on average over the past 12 months to the current rate of $36.46 per square foot. The vacancy rate has increased by 0.2% to 4.3% currently. Despite negative net absorption in Q1 and Q2 of 2023, store openings have outweighed closures in seven of the last 10 quarters. Construction activity in Orange County remains sparse, with only 135,570 square feet of retail space underway, accounting for just 0.1% of existing inventory. Over the past 12 months, the Orange County retail market experienced $937 million in sales volume. Average transaction pricing has fallen to $296 per square foot in 2023 year-to-date, down from a peak of $460 per square foot in 2022. The 12-month sales volume stands at $128 million, with the majority of transactions occurring in Q2.
By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 4.3%
- Rent Growth: 1.9%
- Deliveries SF: 80.9K
- Net Absorption SF: -160K
- Sales Volume: $937M
To view the Q3 2023 market report, click here.
