"The Orange County retail market is gradually starting to feel the effects of continued economic slowing," says John Przybyla, Marcus & Millichap regional manager who helped to prepare the report. "With vacancies edging up and new product coming online this year, local property owners won't experience the dramatic rent increases from the past years."

Rents are expected to level off from last year's highs, due to an abundance of space coming onto the market and the slowdown in the economy, the report says. Meanwhile, the overall vacancy rate, which currently stands at 5.3%, is expected to slowly start to increase to 6%.

However, Przybyla predicts that the region will still attract investment dollars, even if at a slower rate than last year. "Investors are still interested in the market as evidenced by local developer and builder optimism with the Orange County economy, vacancy rates still well below 8% and unemployment rates under 3.5%," he says.