On the north side of San Diego, mixed-use developments are having trouble filling up their retail space. Cities such as San Marcos, Calif., and Vista, Calif., are disappointed in the performance of mixed-use properties they helped develop and are rethinking formats. Vista’s Paseo Point opened in 2016 with nearly 70 affordable housing units. But several stores are still empty.
At another relatively new center, Breeze Hill, the city council has granted the developer a permit to demolish the center and build 88 housing units instead.
Meanwhile the city's landmark mixed-use center, Horton Plaza, which opened in 1985, has fallen on tough times with retail anchors such as Nordstrom departing for greener pastures.
Maybe they are just too many properties competing for a limited number of expanding chains? The market successfully absorbed 327,000 square feet of new space in the fourth quarter, according to CBRE. The market's most recent disruptions were the bankruptcy and dissolution of The Sports Authority and Sport Chalet.
CBRE Econometric Advisors estimates that retail sales in San Diego increased 5.0% year-over-year in 2016 and projects sales to grow at 6.0% in 2017, which is a positive indicator for retail employment.
CBRE reports that retail vacancy was 5.7 percent in the North County market, compared to 7.5 percent in the Southwest Riverside market and 3.5 percent in South San Diego. Power centers had the lowest vacancy rate of any property type in San Diego, at 2.4 percent in the fourth quarter.