News & Opinions
The latest news and insights from Hanley Wood’s outspoken experts and key thought-leaders throughout the residential and commercial design and construction industry.
Certain U.S. Retail Markets Shine Brighter Than Others In Slow-but-Steady Recover
Randyl Drummer / CoStar / August 14, 2013
CoStar Midyear Analysis: Investors Cherry-Pick Deals In Markets With Strongest Fundamentals and Growth Prospects Retail Square Footage per Capita Decreases for First Time in Many Decades
The “happy rainbow” of year-over-over demand growth for U.S. retail space continued to spread across the country at midyear, with shopping center landlords just now beginning to capitalize on accelerating population, employment and housing trends, almost no new retail property construction, and consumers returning to shop in stores once more.
Overall demand for shopping space is gathering momentum as shown by the three-quarter trailing average for net absorption, which rose to its highest levels since the Great Recession during the second quarter of this year. Even if consumer spending dips as rising interest rates and taxes exert pressure on personal income, store closings have slowed and retailers are both more confident and more productive and efficient in how they use their physical space.
“We are seeing the amount of retail square footage per capita decrease for the first time in many decades,” said Ryan McCullough, who co-presented the Midyear 2013 Retail Review and Outlook with Suzanne Mulvee, director of U.S. research, retail for Property and Portfolio Research (PPR), CoStar’s analytics and economic forecasting company. “This opens the door to better [store] productivity, and ultimately rent gains. The light but positive demand we’re seeing is producing a healthier retail market.”