SOUTH BAY | A GLIMPSE TO THE SOUTH, A VISION TO THE NEAR FUTURE…

April 13, 2012 

By: Icela Wittkopp, Sales & Leasing Associate 

South Bay Retail (Economic) Activity:

Anchor Retailers Counts and Malls Development: Companies like Walmart, Target, Costco and Home Depot have decided to invest in multiple locations in the South Bay within less than a 10-mile radius, which could prove to be a boom for San Diego commercial real estate leasing.  
 

But Demographics don’t appear to justify such a heavy concentration of stores and mega centers, especially in areas like Chula Vista. Walmart has rapidly expanded to 5 stores (4+1 Mega Center) in less than a 10 mile radius. Better yet, these Retail markets have not seen a significant slowing down on consumer activity or development. This summer, another mall development starts with groundbreaking in Otay Mesa. 

Mexico-U.S. New Travel Trends & Flights:

Popular Mexican carrier Volaris, signed an alliance with Southwest Airlines and as of July last year, Volaris announced direct flights from Guadalajara and Mexico City to San Diego. 

Border Projects & Infrastructure:

 

 The Federal and Local Government agencies have decided to invest in various projects along the U.S. – Mexico Border, among them: 

San Ysidro International Port of Entry Expansion/Renovation: The goal is to reduce crossing wait times and money. 

Otay Mesa’s Border Crossing Terminal: To ease traffic from Tijuana’s International Airport to the U.S. 

Otay Mesa’s International  Port of Entry: Aiming to reduce traffic congestion of cars and trucks. 

New State Route 905: 70% completed, to be finished this year. 

These market activities and projects appear to contradict the Demographics, Consumer Reports and income per capita. So, if the numbers aren’t the driving factor for the market activity, what’s triggering the economic activity in this sector and improving opportunities for commercial real estate in San Diego? … the answer is, a “Floating Population”. 

This “Floating Population” of  bi-national consumers has a strong preference for recognized American  brands and a cultural trend cash expending.  They are a combination of tourists, employees, entrepreneurs and Small Business owners. Most of them are working and conducting business in the U.S. and living in Tijuana and its surrounding areas. According to SANDAG, the San Ysidro International Port of Entry has a daily count of 50,000+ vehicles and more than 25,000 pedestrians. Otay Mesa’s latest counts reflect 55,000+ vehicles crossing daily. Yet, the transportation of consumer goods brings approximately 700,000 trucks annually. Therefore, the government’s decision to invest in the borders’ infrastructure is not only assertive time-wise but financially necessary. 

The consumer activity is no longer part of the border areas, in recent years, new consumer trends have shown Mexican nationals from other central states are driven to “shopping tourism”.  As affluent Mexican tourists flock to San Diego on Black Friday landing at Tijuana’s International Airport from central Mexico and crossing the border to shop at the nearby malls and shopping centers; Baja’s residents provide a constant year around flow of consumers to the same retail border region. 

In an increasingly economic globalization, new markets represent new opportunities for those ready to adapt. So, what can your broker offer? A Brokerage Firm that recognizes the advantages these multicultural market trends will offer a Diversified Team of Brokers with bilingual skills and cultural expertise to act as a liaison between National clients and International Businesses. Brokers can reach out to potential Tenants and Buyers of commercial real estate in San Diego and provide property exposure beyond borders.