Leasing overview: Pier Plaza 89% leased, Beach Life festival shows visitor gains but tenant effects vary

Brian Campbell, the city's leasing agent, presented a quarterly leasing overview to the King Harbor Commission on Jan. 12, summarizing vacancy, rent and visitation data for Pier Plaza, International Boardwalk and other harbor assets.

Campbell opened the briefing with a regional view: Southern California has experienced progressive negative net absorption since the COVID downturn and rents are forecast to remain weak through 2026 before a gradual recovery in 2028'2029. "Southern California is losing tenants," he said, adding the Los Angeles area has been among the weakest markets. He emphasized that these macro trends frame local leasing work.

Locally, Campbell told commissioners that harbor retail pockets (Fisherman's Wharf, International Boardwalk and several waterfront businesses) are currently fully leased while office space at Pier Plaza is the primary area of vacancy. "Pier Plaza'it's about 89% leased; we've got just over 7,000 square feet available," he said. Across all harbor-controlled properties Campbell counted approximately 36,937 square feet of technically available space, but noted roughly 29,000 of those square feet are the former Fun Factory footprint that is currently unavailable because of ongoing parking-structure work.

Campbell described lease structure and revenue mechanics: most existing leases include a 3% annual base-rent escalation and many retail tenants pay percentage rent to the city (the higher of base or percentage rent applies). "For our retail leases we have a baked in 3% annual increase," Campbell said, and he explained the city treats municipally owned real estate differently from private institutional landlords when setting policy. He reported that new office leases are being signed at roughly $2.50'$2.75 per square foot (base rent), exclusive of county-assessed possessory-interest charges that are billed separately.

The presentation included Placer AI foot-traffic and drive-time heat maps that track visits and demographics. Campbell said International Boardwalk's average dwell time was about 71'72 minutes, while other venues in the Beach Life overlay showed substantially longer dwell time (about 179 minutes). Comparing Beach Life Festival 2024 and 2025, Campbell said Beach Life produced a substantial spike and a net increase in visits in 2025. "Year over year, big increase," he said, while noting tenant reports were mixed: restaurants and bars reported spikes while some retail vendors reported less benefit.

Commissioners pressed staff on lingering month-to-month tenancy. Campbell traced the higher share of month-to-month tenants to a prior litigation phase (Center Cal litigation) that limited long-term leases and the COVID period when many tenants sought flexibility; he said the city has reduced month-to-month tenancy from historic highs to about 27% and aims to lower it into the teens in coming months.

Campbell and staff also outlined near-term leasing work: an RFP for the former Fun Factory site is active (staff said the RFP deadline is in January), parking-structure work must finish before that space can be occupied, and staff will present potential leaseholds and RFP responses to council after a closed-session review. Commissioners voted to receive and file the leasing overview.

What happens next: staff will provide commissioners the added "blue folder" materials (visitation and festival reports) by email, continue outreach for long-term leases on Pier Plaza, review Fun Factory proposals through closed session and then present recommendations to council.