SOUTH BAY | A GLIMPSE TO THE SOUTH, A VISION TO THE NEAR FUTURE…
April
13, 2012
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.
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.
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