Q2 2012 San Diego, California Retail Property Sales Analysis

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Q2 2012 San Diego, California Retail Property Sales Analysis

Metro Volume and Pricing

The second quarter of 2012 was active for retail property sales in San Diego, Reis reports, with 16 sales totaling $84.6 million.* This is generally within the range of recent quarterly activity for this market. The average price per-square-foot was $193. The leading sale in the second quarter was a portion of the Old Grove Marketplace in Oceanside. The 263,062 square feet sold for $19.6 million ($241 psf). Also sold in April was the Glasshouse Square property, at 97,381 square feet, for $11.1 million ($119 psf).

Top Submarkets

Northwest County again led all other submarkets in transaction volume in and square feet sold in the second quarter of 2012, at $164 million and 684,503 square feet, respectively. Northeast County led in price per-square-foot, at $398, followed by West San Diego Beach, at $323.

Cap Rate Comparisons and Forecasts

The mean cap rate for second quarter sales increased 380 basis points over the quarter to 8.8%. The mean cap rate has seen recently some notable quarterly fluctuations, hitting 9.5% in the fourth quarter of 2011 and then sinking to 5.0% in the first quarter of 2012. Such volatility reflects the variability and quality of the properties that are moving. The 12 month rolling cap rate of 7.2% is up 30 basis points over the quarter but down 130 over the year. The 12 month rolling cap rate for both the U.S. and West region is reported at 7.8%. Reis forecasts the rolling cap rate to fall slightly below 7.0% over the next few years.