The following reflects San Diego retail market conditions as of Q3 2026.
The San Diego retail market in Q3 2026 held steady on vacancy while asking rents and construction deliveries continued to climb, and unemployment eased further. Explore our full San Diego retail market report for deeper insights into leasing activity, investment sales, and submarket performance.
Frequently Asked Questions
What is the retail vacancy rate in San Diego in Q3 2026?
The San Diego retail vacancy rate was 4.4% in Q3 2026, according to Kidder Mathews research. This was unchanged from 4.2% in the prior quarter and flat (0 basis points) compared to 4.4% a year earlier in Q3 2025 (Data source: CoStar).
What are average asking rents for San Diego retail space in Q3 2026?
Average asking rents for San Diego retail space were $2.37 per square foot per month in Q3 2026, unchanged from the prior quarter and up 1.43% year-over-year from $2.33/SF/Mo in Q3 2025 (Data source: CoStar).
What was net absorption for San Diego retail in Q3 2026?
San Diego retail posted negative net absorption of -107,816 SF in Q3 2026, meaning more retail space was vacated than newly occupied during the quarter, according to Kidder Mathews research. Year-to-date net absorption stood at -184,977 SF, a marked improvement over the -685,634 SF recorded through the same period in 2025 (Data source: CoStar).
How much retail space is under construction in San Diego in Q3 2026?
There were 158,494 SF of retail space under construction in San Diego as of Q3 2026, according to Kidder Mathews research. This is down 55.93% from 359,641 SF under construction a year earlier in Q3 2025 (Data source: CoStar).
How much retail construction was delivered in San Diego in Q3 2026?
San Diego retail saw 142,378 SF of new construction deliveries in Q3 2026, according to Kidder Mathews research. Year-to-date deliveries reached 182,067 SF, up 88.69% from 96,488 SF delivered through the same period in 2025 (Data source: CoStar).
What was the largest retail sale transaction in San Diego in Q3 2026?
The largest retail sale in San Diego in Q3 2026 was Plaza Bonita in Chula Vista, a 594,150 SF property that sold for $196,901,669 ($331.40/SF), according to Kidder Mathews research. HP Bonita Investments, LLC purchased the property from Plaza Bonita, LLC (Data source: CoStar).
What was the largest retail lease transaction in San Diego in Q3 2026?
The largest retail lease signed in San Diego in Q3 2026 was Trader Joe’s taking 8,630 SF at 222 N City Dr in San Marcos in August 2026, according to Kidder Mathews research. Other notable leases included Bath & Body Works at San Ysidro Village (5,760 SF) and Forge 8 Athletics at Exchange at Miramar Road (5,267 SF) (Data source: CoStar).
What is the outlook for retail investment sales in San Diego?
San Diego’s average retail sales price reached $392 per square foot in Q3 2026, up 63.35% year-over-year from $240/SF, while the average cap rate compressed slightly to 5.5%, down 10 basis points from 5.6% a year earlier, according to Kidder Mathews research (Data source: CoStar).
What retail projects are under construction in San Diego?
Notable retail projects under construction in San Diego include the Alexandria Wellness Center in Miramar/Mira Mesa/Scripps Ranch (45,000 SF, delivering 4Q 2026), 1355 First St in Coronado (7,500 SF, delivering 2Q 2027), and 9404 San Diego St in Lemon Grove/Spring Valley (7,500 SF, delivering 3Q 2027), according to Kidder Mathews research (Data source: CoStar).
Last updated: Q3 2026. Data source: CoStar. Compiled by the Kidder Mathews Research Group.
Q3 2026 San Diego Retail Market: Key Data Points
Explore our full San Diego retail market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Vacancy Rate: Retail vacancy in San Diego held at 4.4% in Q3 2026, flat compared to Q3 2025 and up slightly from 4.2% last quarter.
- Average Asking Rents: Asking rents averaged $2.37/SF/Mo, up 1.43% year-over-year from $2.33/SF/Mo in Q3 2025.
- Net Absorption: Net absorption was -107,816 SF in Q3 2026; year-to-date absorption of -184,977 SF marks a significant improvement over the -685,634 SF recorded through the same period in 2025.
- Construction Pipeline: 158,494 SF of retail space remained under construction, down 55.93% year-over-year from 359,641 SF, while 142,378 SF delivered during the quarter.
- Investment Sales: The average sales price reached $392/SF, up 63.35% year-over-year, while the average cap rate compressed to 5.5%, down 10 basis points from Q3 2025. Plaza Bonita in Chula Vista led sale activity at $196,901,669.
- Leasing Activity: Trader Joe’s signed the quarter’s largest lease at 222 N City Dr in San Marcos (8,630 SF), joined by Bath & Body Works and Forge 8 Athletics among other significant transactions.
Market Breakdown — Quarterly Comparison
| Metric | 3Q26 | 2Q26 | 3Q25 | YOY Change |
|---|---|---|---|---|
| Vacancy Rate | 4.4% | 4.2% | 4.4% | 0 bps |
| Average Asking Rents (SF/Mo) | $2.37 | $2.37 | $2.33 | 1.43% |
| Under Construction (SF) | 158,494 | 300,872 | 359,641 | -55.93% |
| Average Sales Price (SF) | $392 | $445 | $240 | 63.35% |
| Average Cap Rate | 5.5% | 5.5% | 5.6% | -10 bps |
Market Breakdown — Year-to-Date Comparison
| Metric | 3Q26 | 2026 YTD | 2025 YTD | YOY Change |
|---|---|---|---|---|
| Construction Deliveries (SF) | 142,378 | 182,067 | 96,488 | 88.69% |
| Net Absorption (SF) | -107,816 | -184,977 | -685,634 | N/A |
Significant Sale Transactions 3Q 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| Plaza Bonita | Chula Vista | 594,150 | $196,901,669 | $331.40 | HP Bonita Investments, LLC | Plaza Bonita, LLC |
| Terra Nova Plaza | Chula Vista | 96,114 | $30,400,000 | $316.29 | Realty Income Corporation | RREEF Property Trust, Inc. |
| Carmel Mountain Plaza | Carmel Mountain Ranch | 8,400 | $17,407,193 | $2,072.28 | Costco Wholesale Corporation | Kimco Realty Corp. |
Significant Lease Transactions 3Q 2026
| Property | Submarket | SF | Transaction Date | Tenant |
|---|---|---|---|---|
| 222 N City Dr | San Marcos | 8,630 | August 2026 | Trader Joe’s |
| San Ysidro Village | Imperial Bch/South SD | 5,760 | July 2026 | Bath & Body Works |
| Exchange at Miramar Road | Miramar/M Mesa/S Rnch | 5,267 | July 2026 | Forge 8 Athletics |
Significant Under Construction
| Property | Submarket | SF | Delivery |
|---|---|---|---|
| Alexandria Wellness Center | Miramar/M Mesa/S Rnch | 45,000 | 4Q 2026 |
| 1355 First St | Coronado | 7,500 | 2Q 2027 |
| 9404 San Diego St | Lemon Grv/Spring Vly | 7,500 | 3Q 2027 |
Data as of 3Q 2026. Source: CoStar. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
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