Southern California retail market report
Q4 2025
The Southern California (SoCal) retail market showed mixed signals in FY 2025. Vacancy remained elevated and net absorption continued a net negative total from FY 2024 as leasing activity remained cautious. The softness reflected broader economic uncertainty rather than deterioration in market potential as investment sales picked up in Q3/4. SoCal’s retail market has 914k sf under development, with a split of roughly 48%, 25%, and 27% across Los Angeles, Orange County and San Diego, respectively.
5.9%
Vacancy rate at year-end 2025
Vacancy remained stable throughout FY 2025, with available sf rising just 1.7 msf in the year in a market of over 500 msf.
$4.38B
Retail investment sale volume in 2025
Retail investment sales reached $4.38B in volume, a 72% jump from FY 2024 and the highest total since 2022.
-989k sf
Net absorption in 2025
SoCal rendered negative absorption for the second year in a row driven by a nearly 2.9 msf decline in leasing activity.