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Palm Desert 2025 brokers report: leasing is strong but demand outpaces available small retail spaces
Summary
Economic development staff told council that Palm Desert’s central location keeps leasing strong, but rising rents, underused facade grants and a shortage of 2,000–5,000 sq ft spaces hinder small-business growth; staff proposed outreach, Retail Coach use and code updates.
Vanessa Mayer of the Economic Development Department presented the city’s 2025 commercial brokers report at the June 12 study session, summarizing broker feedback, market trends and potential staff ideas to improve leasing outcomes in Palm Desert.
Mayer said brokers repeatedly highlighted Palm Desert’s central location as a selling point and reported generally strong leasing activity, but they also cited rising lease rates across industrial, office and retail sectors and low property-owner turnover along major corridors such as Highway 111 and El Paseo. The report identified a supply mismatch: most available commercial spaces are large boxes (15,000–30,000 sq ft) while market demand skews toward smaller units of roughly 2,000–5,000 sq ft.
Staff outlined nonbinding strategies to address those gaps, including continued outreach to brokers and leasing agents, working with the city’s Retail Coach to market specific vacancies, and examining whether larger spaces could be subdivided on a case-by-case basis. Mayer said staff has been collecting vacancy details (square footage, equipment, triple-net or CAM charges) and forwarding that information to Retail Coach to recruit tenants.
Council members pressed for metrics. One member asked for a return-on-investment analysis of Retail Coach work and for staff to return with hard statistics, while another noted successful facade-improvement examples and suggested promoting them as case studies (the transcript cites Cascuala’s/Casuellas as an example). Mayer said staff will continue coordination with planning and building departments to explore ADA and prevailing-wage implications for facade projects and to develop a business-friendly development toolkit.
Council discussion also raised demand for small industrial condos and the possibility of zoning or code updates to create more flexible, smaller industrial/warehouse spaces that allow entrepreneurs to start small and expand. Mayer said staff will work with Development Services and Planning to evaluate opportunities and report back.
Next steps: staff will follow up with requested Retail Coach performance data, study feasible subdivision of large retail units, and pursue outreach to connect tenants and property owners; no formal council action was taken.
