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What Retail Slowdown?

Despite a lull in US retail as a whole, opportunities in secondary markets especially in the Bay Area are evident as reduced investor demand has increased yields and low cost capital is still readily available.

By Lisa Brown | lisabrown | Updated on August 24, 2017

Raley's Towne Center Raley’s Towne Centre in Rohnert Park was recently acquired for $24.6 million.

ROHNERT PARK, CA—Job growth in the counties of San Francisco/San Mateo and in the North Bay  region continued to rise in the second quarter of 2017, and the unemployment rate fell to the lowest level since 1999. According to the California Employment Development Department, the unemployment rates in San Mateo, Marin and San Francisco counties continued to be the lowest three in the state at 2.4%, 2.6% and 2.7%, respectively. The total regional unemployment rate in North Bay (Marin, Napa, Sonoma and Solano counties) was 3.4% in the second quarter of 2017, falling -70 basis points from 4.1% last year. Employment in the San Francisco/San Mateo/North Bay Region now stands in excess of 1.6 million.

In the second quarter of 2017, shopping center vacancy throughout San Francisco/San Mateo/North Bay was recorded at 5.3%, according to Cushman & Wakefield‘s latest retail report of second quarter. It was up +80 bps from last quarter’s figure of 4.5% and +100 bps from 4.3% rate one year ago. San Mateo County had the lowest vacancy rate of 1.9%. Three of the four counties in the North Bay continued to maintain the vacancy rates below 5%: Napa County (2.7%), Marin County (3.2%) and Sonoma County (4.1%). Only Solano County had a higher vacancy rate of 10.3%.

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