Brokers Say Orange County Affluence Will Lure More East Coast Retailers : RETAILING

Compiled by Mary Ann Galante, Times Staff Writer

The expected arrival of R.H. Macy & Co. could be only the beginning of an East Coast onslaught, according to a report by real estate brokers Grubb & Ellis.

The company's annual forecast, released last week, predicts that East Coast retailers will be drawn to Orange County's golden marketplace. The report also forecasts a continued influx of out-of-state developers, who will also be battling for shoppers' dollars.

The big attraction is Orange County's median annual income of $45,000, said Timothy McMahon, senior marketing consultant with Grubb & Ellis.

Retailers can take some comfort, though, from the "pent-up demand" that McMahon said exists here.

Even so, vacancy rates in retail space will climb from the current 5% to about 7% to 10% this year, he said--which means that rents will be flat.

Among his other 1988 forecasts:

Another 424,000 square feet of retail space will be added to existing centers.

Competition and market segmentation will tighten as the retail market is impacted by large children's stores, such as Kids-R-Us and contemporary home furnishings, such as STOR.

Orange County will see more mixed-use retail in high-rise office development. Office density has reached the point where office workers can support retail businesses in office buildings, McMahon said.

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