The San Diego retail market has seen healthy demand across the sector, with only a single submarket recording negative net absorption in the third quarter of 2023. Among this encouraging data, the 156,132 square foot retail asset has been offered for sale for $12.46 million, or approximately $80 per square foot. The building is currently home to the Macy’s department store located at 2559 El Camino Real in Carlsbad.
Marketing efforts are led by CBRE’s team consisting of Arthur Flores, Jay Gomez, James Kaye and Kyle Kaye. The property is currently owned by an entity linked to MSC LLC, according to public records.
The two-story class C building was originally constructed in 1979 and sits on a total of 1.71 acres of land. The latest renovation was completed in the year 2000. According to the marketing materials, the building currently has a cap rate of five percent and a net operating income of $622,875 per year. The property also offers 150 parking spaces for employees and customers.
The Macy’s department store building is part of The Shoppes at Carlsbad, one of the largest indoor malls in North San Diego County. The mall has a total of 1.1 million square feet of leasable space and is home to over 150 retailers. Macy’s, a long-standing tenant at this site since the mall’s inception, has recently exercised its third option lease period, which is set to conclude in October 2029, with two additional five-year options still available. Some of its immediate retail neighbors at the mall include JCPenney and Sears, as well as a separate Macy’s Men’s store.
The property is located just off California State Route 78 and within easy reach of US Interstate Highway 5 and local public transportation links.
As CBRE recently reported, vacancy rates in the San Diego retail sector were notably lower than the market’s 2017 to 2019 average, and prime locations in sought-after shopping centers were practically non-existent at the end of the third quarter of 2023. Total vacancy in the third quarter fell to 4.6 percent, a decrease of 30 basis points from the previous quarter, and the lowest reading since the second quarter of 2019.
The limited construction activity has played a significant role in maintaining high occupancy rates, and there are no signs of this trend abating in the near future. Over the past decade, the retail inventory has expanded by a mere two percent, with only one project in progress during the third quarter of 2023, adds the report.
Although the macroeconomic outlook remains uncertain and could influence retailers’ short-term strategies, San Diego retains its coveted status within the retail market, and the prevailing indications strongly suggest that this trend will persist in the long term, concludes the CBRE report.
