Bay Area retail market remains strong into second quarter
In 2018, the San Francisco Bay Area retail property market is going strong, despite occasional mention of the “Retail Apocalypse” suggested by the online juggernauts of the world (i.e., Amazon).
Overall direct rents have dipped slightly, coinciding with a slight uptick in overall vacancy but are up 16 percent over the past five years, thus confidence appears to be as strong as ever through the first half of 2018, according to Transwestern.
The South Bay reported the strongest performance as far as rental rates with an increase of 4.5 percent.
Sales volume for retail properties in the Bay Area hit $879 million, compared to a mere $187 million in the first quarter. This was also reflected in the average sale price per square foot. The average price per square foot rose to $476, up 7.3 percent from the previous quarter and more than 30 percent higher than a year ago. While leasing activity in the Bay Area market was slower in the second quarter, investment was strong, indicating that retail product in the Bay Area is still considered a valuable asset among investors.