Southern California Retail Investment On the Rise

Investment in Southern California retail properties is on the rise in the region despite less retail space selling overall.

In the first six months of the year, retail investment in Southern California reached more than $3.5 billion in Los Angeles, Orange and Ventura counties and in the Inland Empire, Commercial Observer reported. The new figure marks a nearly 62 percent increase compared to the same period last year, according to a new report from NAI Capital cited by Commercial Observer.

At the same time, the Greater Los Angeles region saw a 28 percent year-over-year decrease in the square footage sold in the first half of the year, with nearly 8.4 million square feet trading hands, compared to almost 11.6 million in the first six months of 2025.

The broader increase in investment can be credited to buyers and sellers being more in agreement on pricing for properties, particularly for higher-value assets, according to NAI Capital. Development, meanwhile, is on the decline, with completed projects dropping 45 percent year over year to 473,008 square feet. The overall amount of space in the development pipeline fell 10.2 percent to 1.5 million square feet.

Of the Los Angeles-area counties, Los Angeles County came out on top in sales volume with $1.7 billion in retail property sales, a year over year increase of 64.6 percent across nearly 4 million square feet. Orange County retail investment sales reached $976 million, with demand being strongest for smaller, premium retail properties and those near the coast. Away from the ocean, in the Inland Empire, the retail submarket saw an increase in investment of 142 percent year over year.

Retail vacancy in the region declined from 6.3 percent to 5.9 percent, while average asking rents rose 1.1 percent to $2.36 per square foot. At the same time, leasing volume fell 14.6 percent year over year to more than 6.2 million square feet.

— Chris Malone Méndez