San Diego Retail Market Report

Vacancy remains limited in largest submarket. Mirroring other major retail markets, San Diego registered negative net absorption in the first half of 2025 after a multi-year stretch of encouraging tenant demand. Property performance in Central San Diego, however, remains standout on a statewide level. Entering July, the area’s 3.8 percent vacancy rate was the lowest among California submarkets with more than 30 million square feet of space. Encompassing Downtown San Diego, Mission Valley and popular beach communities, local retail fundamentals are notably impacted by tourist spending, which reached a record mark in 2024. With San Diego International Airport’s new Terminal 1 opening in September, more inbound flights are expected — a potential boon for theses retailers. Demand for available space should also be helped by the submarket’s construction pipeline, which was accounted for as of August.