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).
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.