Capital Markets at JLL​’s Post

In Q2 2024, the retail sector exhibited varied performance across different segments. Overall, dealmaking in the consumer and retail sectors saw significant activity, with transaction values surging by 63% year-over-year, despite a 9% drop in transaction volume. Major acquisitions included Home Depot's $18.25 billion purchase of SRS Distribution and Hudson's Bay Company's $2.65 billion acquisition of Neiman Marcus (Investment Banking Services) (Placer Library). Retail sales remained steady, supported by a strong job market with unemployment below 4%. However, high inflation and interest rates continued to strain consumers, leading to stagnant retail sales and increased debt burdens (Investment Banking Services). The demand for retail space also surged, with an increase of 54 million square feet, particularly in sectors like food and beverage, discount, off-price, and experiential retail. The national retail vacancy rate held steady at 4.1%, indicating strong demand and fewer tenant bankruptcies (Investment Banking Services). For more detailed insights and trends, including specific performance metrics for different retail categories, the full reports from Colliers, Cushman & Wakefield, and Placer.ai provide comprehensive data and analysis (Investment Banking Services) (Placer Library).

Transaction velocity in the Central Texas retail market experienced a significant decline, with a 63% decrease in number of deals from 2022 to 2023. There were more sales in the San Antonio market, recording 83 transactions compared to Austin's 36 during the same period. From 2022 to 2023, transaction velocity decreased by 70% in the San Antonio area while Austin experienced a more modest decline of 43%. In San Antonio, cap rates increased about 50 basis points from 2022 to 2023. In Austin, cap rates remained relatively stable, partly due to the low inventory in the smaller market.

The Fall 2024 Retail Conditions Report is here!🍂 Our latest report offers insider analysis on the state of #retail during the period from June to September 2024. As consumers grapple with financial pressures, we're witnessing a marked shift toward value-driven retailing. While recent interest rate cuts have provided some relief, discretionary spending remains cautious, and even the typically robust Back-to-School season showed minimal growth. RCC Members can access the full report and all past Retail Conditions Reports here: https://hubs.ly/Q02Rp_-H0

Inflationary cost pressures were the major driver behind retail insolvencies and defaults last year. This is likely to continue into 2024, as retailers struggle with subdued demand and higher costs. There have been contractions in some areas, including home and furniture. Smaller players will suffer most in a shrinking market, as many are unable to access more favorable pricing and payment terms. To read more about the retail trends in 2023, click here: https://brnw.ch/21wG5gq #Inflation #Retail #ConsumerDurables #Trends #TradeCreditInsurance #Atradius

When will transaction volume pick up and the market stabilize in the retail sector? 1. It already has. 2. In Q3/Q4 2024. 3. In 2025 and beyond.

The retail industry faces significant risks from inventory shrinkage, employee theft, fraud, so on and so forth.... Effective loss prevention strategies are essential to protect assets and ensure business sustainability. Let's delve into the world of retail losses with MOKI and discover actionable solutions.

Is it all good news for retailers and property owners? If you do not have time to read the entire article, please allow me to extract and apply the relevant: “The retail vacancy rate of 5.3% in the second quarter of 2024 was the lowest in the last 20 years. A net 1.4 million SF of retail space was absorbed in 2Q2024, recovering from the first quarter's first negative reading in three years” What caused the drop? “Retail was buoyed by a 2.4% increase in real personal consumption spending compared to 2023 as real disposable personal income rose 1.1%” As people have more money to spend, retailers are expanding or securing their spaces. Yet, what is the catch? "Credit card usage is at an all-time high and delinquencies for some cohorts are rising," High credit card usage and rising delinquencies indicate financial stress among consumers. While spending is up, it’s often on borrowed money, which raises concerns about sustainability. How have retailers reacted? “Demand for retail space in the first six months of 2024 was 91% lower than in the same period in 2023. It's safe to say that occupier sentiment is cooling.” Could there be any other factors? “Absorption might be affected by the limited shopping space up for lease as retail construction dived. The 9.8 MSF of retail construction in 2023 set a new low, accounting for only 0.2% of existing inventory compared to the average of 0.6 to 0.9% from 2015-2019. For the first time in years, the retail market is at a point of being supply-constrained – at least for space in quality shopping centers." What about occupancy cost? “Rent was not the only factor. Fit-out construction, operations, security, insurance also contributed, and could lead stores to cut back on expansion plans” The retail landscape remains solid. However, as CRE professionals and investors, we need to watch consumer spending patterns. #cre #crelending #commcap #creinvesting #retial

It looks like retail sales are still supporting the economy. It is one of many factors such as human capital, infrastructure, investment, debt, etc. Strong retail sails is a positive sign. We have to wait to see what the rest of the market data says. Mixed but positive. The National Retail Federation: Retail sales will increase between 2.5% and 3.5% in 2024 #retail #economy #escanaba #community #invest https://lnkd.in/ehbsfcBm

We're delighted to share that our latest report, produced in partnership with beBettor, has been featured in Retail Week. Our research predicts a £2.4bn downturn in retail spend for 2024, offering key insights for navigating the evolving consumer landscape. 🔍 Key Findings: Shifts in consumer spending and their impact on the retail sector. Strategic advice for retailers to effectively adapt to these changes. This report is vital for retailers, investors, and policymakers to drive growth in challenging times. 🔗 Read the full feature here: https://lnkd.in/edphghHH #RetailEconomics #beBettor #RetailWeek #UKRetail #MarketInsights #RetailInsight #Featured #InsightReport #Retail #Retail2024

Retail vacancy rates are falling and absorption rates are positive in over half of the major markets across the US. This is a major shift, making retail one of the top-performing asset classes in 2024. While office and industrial real estate are facing headwinds, retail is experiencing a resurgence. This could be due to a number of factors, including a strong economy and a growing consumer base. Learn more: https://bit.ly/4bIFEUN