During the pandemic, the retail sector faced significant challenges due to national lockdowns, which restricted visits to retail stores and compelled consumers to rely on online retailers for their purchases. However, as restrictions eased, consumers gradually returned to visiting brick-and-mortar establishments. During the lock downs visitation for all retail centers represented where down substantially with the bigger centers seeing a 360% increase from pandemic until now.
When examining four of Orange County's prominent retail centers, it was observed that in 2023, there was an average of 10 million visits per quarter. This is a notable increase compared to the period of 2020 and 2021, during which the average was just 8.6 million visits per quarter. This uptick in visitation indicates a resurgence in consumer foot traffic to physical retail locations as the effects of the pandemic diminish.
The retail sector in Orange County has remained robust, fueled by increased visitations, a higher-income consumer base, strong job growth, and a thriving tourism industry. Furthermore, ongoing redevelopment projects are transforming obsolete retail sites into multifamily properties, with over 1.1 million square feet demolished since 2021. Currently, there is only 99,000 square feet under construction in this market.
These factors have contributed to keeping availabilities at 4.2%, the lowest it has been in over a decade. With limited retail space available and higher-end shopping centers operating at full or near-full occupancy, Orange County's retail sector is expected to remain highly competitive. This trend underscores the attractiveness of the region's retail market despite challenges faced during the pandemic.
“The retail leasing sector in Orange County demonstrates remarkable resilience amid economic challenges. While higher capital costs and economic pressures are undeniable, they have not hindered new store openings. Instead, these factors are prompting retailers to approach their expansion strategies with greater precision and thoughtfulness.” says Kameron Graylee – Retail Specialist at Avison Young.