Southern California Retail Investment Jumps 62% in First Half of 2026

Even though less retail space is changing hands in Southern California, commercial real estate investment firms are still pouring a lot more into the asset class so far in 2026.

Thanks to slow construction and improving sentiment, retail investment sales hit $3.52 billion during the first six months of the year in Los Angeles, Orange and Ventura counties and in California’s Inland Empire. That marks an almost 62 percent increase compared to this time last year, according to a new report from NAI Capital.

That jump comes despite a 28 percent drop in the square footage traded over the first half of the year. About 8.35 million square feet in the aforementioned regions sold to new owners by the end of June, compared to 11.55 million square feet in the first half of 2025.

NAI Capital reported deals have shifted to higher-value properties, and attributed the jump in investment to buyers and sellers being more aligned on pricing. Completed construction declined 45 percent annually to just 473,008 square feet, while the development pipeline also declined 10.2 percent to 1.5 million square feet.

L.A. County led in volume with $1.7 billion in retail property sales, which is up 64.6 percent over last year, across nearly 4 million square feet, according to NAI Capital. Asking rents rose 1 percent to $2.98 per square foot triple net.

Propelled by a 3.8 percent vacancy rate, Orange County’s retail investment sales hit $976 million. NAI Capital said demand remained particularly strong for smaller, premium retail properties and coastal assets.

The Inland Empire also saw a relative investment spike with a 142 percent yearly increase, while its Riverside and San Bernardino counties recorded a 9.3 percent increase in leasing so far this year.

For the region, though, leasing volume declined 14.6 percent compared to last year to 6.23 million square feet. But overall retail vacancy improved to 5.9 percent from 6.3 percent, and average asking rents increased 1.1 percent to $2.36 per square foot triple net.

Barring a drop in consumer spending, NAI Capital expects retail investment to extend its gains through the second half of 2026, driven by grocery-anchored and service-oriented shopping centers.

Gregory Cornfield can be reached at gcornfield@commercialobserver.com.