San Jose Retail Market Report

Marginal deliveries aid existing properties. Roughly 5,000 apartments were absorbed on net in the first half of the year across the metro — an indication of localized population growth that is likely to have positive implications for area retailers at a time of potential volatility. Even so, the number of second-half planned move-ins for retail space in greater San Jose will trail the same period in 2024. This dynamic, combined with store closures, will place upward pressure on vacancy. Fortunately, construction activity is extremely scant throughout the metro, directing tenants to existing properties. Palo Alto, Sunnyvale and other areas that have avoided net relinquishments of late may outperform other submarkets.