According to the research, which has been recently published by Burnham Real Estate, only 202,232 sf is available in a market that currently encompasses more than three million sf of retail space. "The Downtown retail market is thriving, supported by blocks of new for-rent and for-sale housing that is catering to higher income groups, as well as to the national recognition that the area is on its way to becoming a thriving 24/7 district," says Bill Shrader, a vice president with Burnham's urban retail advisors team.

When it comes to Downtown retail, perhaps the most successful neighborhood is the Gaslamp Quarter. The area is currently experiencing a vacancy rate of 1.7%, with interest beginning to grow in the popular 5th Avenue restaurant corridor, Burnham's researchers say. Rental rates along this street are currently approaching $4 per sf, they add. And as the high rents push out less successful restaurants, new retailers are waiting in the wings to gobble up the space. "The restaurant spaces being left behind are being snapped up by retailers who want be part of the 5th Avenue synergy," Shrader points out. New tenants that have recently inked leased here include Quiksilver and Puma.

Right on the heels of the Gaslamp Quarter is Little Italy, with retail rents here reaching $3.50 per sf. The neighborhood has nearly doubled its retail inventory over the past year, having grown from 155,810 sf (as of Dec. 30, 2002) to 297,560 sf today, according to the Burnham study. "Little Italy is evolving into an alive and animated 24-hour neighborhood," Shrader says. "Its emphasis on mid-rise condominium development has attracted a strong and still growing base of residents that are supporting new retail and restaurant venues."