West Coast Retail Real Estate Outlook: Vacancy, Consumer Spending, and E-Commerce Shifts

Key Data Points

West Coast Retail Vacancy Divergence: Urban West Coast retail vacancy has risen to 8.1% in Q3 2025, while suburban areas remain lower at 5.1%, highlighting suburban retail’s resilience. (Source: Kidder Mathews Research)

Retail Vacancy Rates Across Major West Coast Markets (2025):

• Seattle: ~6%
• San Francisco Peninsula: ~8%
• Los Angeles: ~7%
• Phoenix: ~5%
• Boise & Reno: below 5%

This variation underscores regional demand differences across the Western U.S. retail landscape.

West Coast Retail Foot Traffic Recovery: Post-COVID retail visits have returned or exceeded pre-pandemic levels in several metros:

• Boise: 106% of 2019 traffic
• Inland Empire: 104%
• Reno & Sacramento: 102%
• Seattle: 97%
• San Francisco: 85%

U.S. Retail Sales Growth Slows but Remains Positive: Retail and food service sales (excluding autos) grew 2.6% annually from 2023–2025, compared to 3.4% pre-pandemic—reflecting slower, steady consumer spending. (U.S. Census Bureau)

E-Commerce Growth Slows: E-commerce now represents ~15% of total retail sales, but year-over-year online growth has cooled from double digits pre-2020 to around 7% in 2025.

Consumer Confidence Weakens: Both the Conference Board and University of Michigan indices show consumer sentiment trending downward since 2021, impacting discretionary retail activity.

Retail Store Closures Outpacing Openings: In 2025, national store closures are exceeding openings, reversing post-COVID retail expansion trends. (Source: Coresight Research)

Inflation Trends and Consumer Price Stability: Total inflation stabilized around 2.9% in 2025, aligning closer to the Federal Reserve’s 2% target, while food and energy categories remain volatile.

Rising Food Prices Influence Consumer Spending in Retail: Key food categories like eggs (+10.9%) and meats (+5.6%) show the strongest inflationary increases, straining household budgets and influencing retail spending habits.

West Coast Retail Market Forecast (2025–2027): Kidder Mathews forecasts modest absorption, limited new construction, and a gradual decline in vacancy rates through 2027—signaling a balanced market recovery.

 
View the macro market trend charts at the link below.
 

 
 
About Kidder Mathews
Kidder Mathews is the largest fully independent commercial real estate firm in the Western U.S., with over 900 professionals in 19 offices across Washington, Oregon, California, Nevada, and Arizona. We offer a complete range of brokerage, appraisal, asset services, consulting, and debt & equity finance services for all property types. Kidder Mathews averages over $9 billion in transaction volume, manages more than 58 million square feet of space, and conducts 2,400 appraisal, consulting, and cost segregation assignments annually. For more information, visit kidder.com.