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SAN DIEGO-A recent deal and a market report reinforce a bullish optimism for the city's retail sector. In the deal, private investors have paid nearly $2.8 million for a 5,000-sf mixed-use building that sits on a 10,000-sf site at 1001 Broadway. Plans call the new owners to rehab the property for 4,500 sf of ground-level retail along with five residential units above the retail. As part of the project, Bill Shrader and Corinna Gattasso of Burnham Urban Retail Group will handle retail leasing. Shrader represented the buyers as well as the seller, Rummani Company Inc. It is projects like the one on Broadway that have real estate people bullish. "Redevelopment has been the key word in San Diego's retail sector," says Marc H. Doyle, executive vice president and COO of Grubb & Ellis|BRE Commercial. "Properties in poor condition as well as development pads for residential complexes all are fodder for the infill juggernaut."According to a report Grubb & Ellis|BRE Commercial vacancy rates are expected to stay under 3% for the year, with the booming population and low interest rates among the chief indicators for the healthy market. And, with residential booming in the Downtown area, there's retail needed to fill the growing demand. "Leasing activity Downtown should maintain its frenetic activity through 2005, as retailers seek to capitalize not only on the new residents, but also on the seemingly endless stream of tourists," Doyle says.However, not all the news is picture perfect for retail. Doyle adds that activity in the retail sector is expected to slow this year, though absorption should continue on at high levels.