You Stay Classy San Diego
Some random tidbits about the current real estate market in San Diego and South Riverside.
Debt markets: Life company lenders remain active. However, these lenders are mostly interested in very high quality institutional assets. Word from the national MBA meeting that just ended was that attendance was down 25-50% from last year. Many conduit lenders were passing out cards looking for jobs. Spreads have increased from 215 over to 255+ in last few weeks.
A broker told me that 1 out of 9 houses are in foreclosure in the city of Murrieta in the Inland Empire. Not sure what the source is for this. Take it for what it is worth.
Retail tenants are now shifting focus to in-fill rather than “growth areas” (e.g. Inland Empire). Big box retailers are changing their expectations. A recent example was a looking for 30,000 SF that normally paid between $16-$23 PSFY. They told the broker to forget about what they paid before and want all deals to be lower now.
A new grocery anchored center is breaking ground in San Diego County and all of the LOIs were inked 2+ years ago. All will need to be renegotiated and some tenants may fall out. Market rents today expected to be “lower” than 2 years ago.
A retail leasing broker commented that he is getting re-traded a lot on pending leases. Furniture tenants are dead. Banks remain active as well as national chain fitness tenants.
Posted by: Rich
