Retail Complex Attracts $840 Per SF

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LA JOLLA, CA-Already well into 2006, San Diego’s retail market does not show any signs of slowing, with the recent sale of a 7,384-sf boutique retail center. The 100% leased retail center brought $6.2 million in the deal, but what was more significant was the selling price of $840 per sf.Known as International Shops, the two-building property is located at 1237 Prospect St. within the Village of La Jolla. The property was built in the early 1960s. Tenants include DK Maltin Jewelers, La Dolce Vita Restaurant and Deli-licious.The limited partnership 1237 Prospect LP purchased the two-building complex. The seller was 1237 La Jolla Land Partners Ltd. Phil Wise of Colliers International and John Drummond of Capital Growth Properties represented the buyer, while the seller was represented in-house.According to a recent market report released by CB Richard Ellis, San Diego’s retail market continues to boom, with lease rates for retail space increasing in the first quarter of this year. The cost increase from $2.03 to $2.07 represents the 10th straight quarterly hike for the retail market.While the retail vacancy rate stands at 2.4% for all of San Diego County, the La Jolla submarket is 100% occupied, with all 659,033 sf of retail space occupied. The tight market also has no new product in the pipeline, according to the report.In all of San Diego County, roughly 2.9 million sf of retail product was under construction at the end of the quarter. Construction activity was up during the first quarter with some 282,500 sf hitting the market. Major projects in the pipeline include the 850,000-sf Otay Ranch Town Center in Chula Vista; the 354,000-sf Grand Plaza in San Marcos; and the 412,000-sf Village Walk Plaza in Murrieta.Demand for retail space has held strong as 183,000 sf was absorbed last quarter. However, that number was off the three-year quarterly average of 231,000 sf of net absorption.