The Marin County retail shopping centers market ended 2008 with a 6.2% vacancy rate, a moderate 220 basis-point increase compared to its mark of just 4% at the close of 2007. The average asking rental rate for shop space was $27.87 per square foot (NNN) at year-end 2008. The total gross leasable area (GLA) of all retail centers in Marin County, excluding malls, is approximately 3.7 million square feet. The bulk of this inventory lies within the neighborhood center category, which accounts for 36%, or 1.4 million square feet, of GLA. The next highest inventory contributors are power and community centers, at 773,250 square feet and 745,142 square feet, respectively. Total availability across all retail centers (excluding malls) amounted to just 231,816 square feet, comprised of shop and anchor spaces.
The Marin County retail centers market is divided into three submarkets: South, Central and North Marin. The total GLA square footage in these submarkets is 675,630 square feet (South), 1.1 million square feet (Central) and 1.9 million square feet (North). The vacancy rates for South, Central and North Marin County were widespread, closing year-end 2008 at 3.4%, 3.5% and 8.6%, respectively. The top tier average asking rental rates were $0.47 apart for South and Central Marin County, which ended 2008 at $36.06 and $35.59 per square foot (NNN), respectively, while North Marin recorded a much lower average asking rate of $25.64 due in part to the diversity of property type in this submarket. Average asking rates for the entire County ranged from a low of $15 to as much as $55 per square foot (NNN).
Consumer price index
The consumer price index (CPI) is the benchmark for rental rate escalations in leasehold agreements. The CPI for the Bay Area witnessed a steady increase from the close of 2007, and the CPI as of year-end 2008 stood at 225.824, which translates to a YTD-over-year rate of 3.5% while the average change YTD-over-year is 3.6%. n
Notable Lease Transactions in 2008
Tenant Location City Rentable SF
Safeway Hamilton Marketplace Novato 55,000
Delano’s Market Cove Shopping Center Tiburon 44,990
Crate & Barrel Corte Madera Town Center Corte Madera 18,877
Trader Joe’s Cost Plus Plaza Larkspur 10,000
Pet Food Express Hamilton Marketplace Novato 7,448