Moreover, two new reports on the county's retail market show that e-commerce is having little effect on the bricks-and-mortar spending habits of San Diegans. Retail vacancies at the start of the third quarter stood at a record-low 3.7%, nearly half the 6.3% vacancy rate of a year earlier, according to statistics compiled by the San Diego office of CB Richard Ellis.
Tenants absorbed more than 1.3 million sf of retail space in the county during the first six months of the year, according to a different report by locally based Burnham Real Estate Services. That compares to 1.7 million sf of absorption for all of 1999. A full slate of tenants accompanied the opening of the nearly 500,000-sf Marketplace at Mira Mesa, anchored by Home Depot.
Meanwhile, another 1.7 million sf is under construction, including the 560,000-sf Fenton Marketplace in Mission Valley. Costco, Lowe's and Ikea stores anchor the center.
Construction is likely to remain brisk in the foreseeable future. Plans for the $1-billion Ballpark District in Downtown include at least 150,000 sf of new retail, anchored by the $105-million East Village Square.
Other parts of the county are also seeing a flurry of new retail construction. Shopping space is a cornerstone of the International Gateway of the Americas, a $260-million, 1.4-million-sf mixed-use development on the border of the US and Mexico. The project is a joint venture of LandGrant Development of San Diego and JER Partners, a billion-dollar global real estate fund headquartered in McLean, VA.
Groundbreaking for the project's first phase--a 625,000-sf open-air mall--is scheduled for this fall, with completion slated for November 2001.
Transportation improvements will clear the way for both residential and retail development in the area, real estate analysts say.
"The construction of State Route 125 will have a profound effect on the retail real estate market in South County," says Reg Kobzi, a Grubb & Ellis vice president specializing in retail real estate. "Development in eastern Chula Vista will ultimately double the size of the city's population, leading to extensive future retail development."
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