Revesco Properties’ Post

Retail vacancy rates in the U.S. have plummeted to a record 4.1%, thanks to high demand and limited new construction. With old stores being replaced by new tenants and rents climbing, finding retail space is tougher than ever. While retailers are growing, high costs and tight space may curb expansion. #retailtrends #commercialrealestate #retailrealestate #investment #realestateinvestment Source: https://hubs.li/Q02KQskB0

With a continued lack of supply of retail space, demand from retailers remains high. Market rents and vacancy rates varies by region. Retail vacancy rates and market rents continue to favor retail landlords, according to an analysis of CoStar Group data. Market rents are highest in the Northeast and Western states while vacancies are lowest in Mid-Atlantic and Northeast regions. Graph by ICSC.

🚨 Retail Trends Alert! 🚨 With retail vacancy rates at a 20-year low and rents continuing to climb, the demand for quality retail space remains strong! 🏢💼 Consumers are spending, and retailers are expanding — but limited new construction means the supply is tight. Interested in how this impacts your investment? Let's dive deeper into the numbers and what it means for future opportunities! 📈🔍 #RetailTrends #RealEstateInvesting #CommercialRealEstate #RetailGrowth #RetailInvestments #MarketUpdate #RetailInsights #InvestSmart #VacancyRates #RentGrowth #GDLCapital

The national retail vacancy rate dropped ten basis points during the fourth quarter, reaching 4%. Leasing activity continues to be impacted as minimal space availability holds back leasing on the supply side, and concerns over rising operating costs and moderating sales gains affect demand. Sources: Colliers Research, CoStar Analytics #CRE #VacancyRates #NationalLeasing #Colliers

What are the latest #UKRetail sector trends to know right now? ⬇️ Net absorption of retail space has turned negative over the past 12 months, following a big post-pandemic rebound in the previous year. The national retail vacancy rate has increased as a result, and average rents are beginning to decline again. Schedule a demo to see how CoStar’s #CommercialRealEstate insights can support your business: https://bit.ly/3Wogc1m

Monday Knowledge Nugget: Opportunities and challenges of Index-linked rents in the retail sector Retail Institute published an article (https://zurl.co/MYGF) about how Index-linked rents, which are linked to the consumer price index, help landlords to maintain the value of their properties. For retailers, however, they currently represent a high economic burden due to cost-driven inflation. 📊 Facts: • EHI survey: 46% of retailers experienced index increases in over half of their stores in 2022; 58% expect even more increases in 2023. • 79% of retailers report full increases. 🤝 Solutions: • 26% of retailers were often only able to implement partial increases. • 71% of respondents are in favor of a statutory cap. What experiences have you had with index-linked rents? Share your thoughts! 👇 #retail #realestate #technology

The latest National Association of Realtors (NAR) “Market Insights” report comes with more good news for a retail sector that’s showed remarkable resilience in recent years. NAR’s August figures show that the retail sector continues to maintain a record low vacancy rate, with just 4.7% of retail space available for lease.   Looking ahead, a number of additional factors are likely to shape continuing demand for retail space. Among the biggest is consumer sentiment, which McKinsey & Company reports is holding strong, even in the face of economic uncertainty. Equally important are regional differences as some states benefit from robust consumer spending and high rental rates, while other areas face a tougher challenge. To learn more, read our latest blog HERE: https://lnkd.in/gKPUG5U3 #TheNAIDifference #NAIMopperBenton #CRE #CommercialRealEstate #SavannahRealEstate #GeorgiaRealEstate #Retail #RetailSpace

-The retail vacancy rate of 5.3% in Q2 of 2024 was the lowest in the last 20 years. A net 1.4M SF of retail space was absorbed in 2Q2024, recovering from Q1's first negative reading in 3 years. -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. Currently, there is only 11.3 M SF of retail space under construction, so new supply will remain paltry for the next several years. -Despite these challenges, the overarching takeaway is that retail real estate remains in a healthy place. #cre #nnn #netlease #retailrealestate #supplyconstraint

The Q1 2024 Inland Empire Retail Figures report was just released by our local CBRE Retail Research Team. Full report attached; some highlights: - The Inland Empire Retail Real Estate Market saw sizable negative net absorption (nearly -200K SF) for the first time since the pandemic - largely driven by corporate store closures. - Lease rates remained stable (approx. $2 PSF NNN average) as positive retailer (occupier) sentiment still exists nationally, but especially in the Inland Empire where population growth exceeds California's coastal regions. - Space under construction decreased from just under 1.1M SF in Q4 '23 to just above 800K SF in Q1 '24. This is still trivial compared to the ~85M SF of supply that exists in our region. - Current construction and lending costs continue to make most (but not all) proposed retail projects unfeasible. - Overall vacancy is around 6%, a 0.2% increase compared to Q4 '23 - however segments vary widely. For Strip Centers, vacancy is still near 2%, whereas Community Centers sit above 7%. - The Inland Empire's unemployment rate is at 5.5%, just under California's 5.6% unemployment rate, which currently leads the nation (4.2% nationwide). Big thanks to Conrad S., Rick Cozart, Deepa Shah - and the rest of our research team for putting this together.

What are your thoughts on a supply-constrained retail market spelling investment opportunities? 🤔 The scarcity of high-quality spaces can be a cue for investors to focus on redeveloping and modernizing existing properties. While costs remain a challenge, this approach usually beats land acquisition costs and building from zero. Besides, renovating in phases can offer flexibility, spreading expenses over time and allowing continued operation and, therefore, continued income generation from other parts of the property. To add value, developers, investors, and owners can also focus on transforming underperforming sections of shopping centers into spaces for currently popular tenants like grocery stores, which have proven to drive significant foot traffic. However, let’s not forget the benefits of smaller tenants as well. Prioritizing flexible lease terms to attract a diverse mix of smaller, niche businesses can work as a way to reduce the risk of relying on a few major tenants, stabilize cash flow, and potentially lead to higher overall rental yields. On top of that, the buzz experiential retail spaces are creating shouldn't go overlooked. Adding entertainment venues, dining options, and entertainment hubs featuring virtual reality or interactive retail experiences that draw consumers and increase the time they spend on the property is a concept worth exploring. As for location, there is potential in secondary markets with population growth and positive absorption rates, such as Las Vegas, Phoenix, and Tucson, as well as in areas where tourism is a key factor. The article Camille Renshaw shared (thanks for the summary!) reminds us of a very important fact: performance heavily depends on consumer spending, so monitoring it and its trends is essential when evaluating investing in retail. We need to keep this in mind. While current trends are favorable, factors such as rising credit card usage and personal savings rates need to be watched closely to anticipate any potential downturns in consumer spending. What other approaches do you think are worth considering to capitalize on the current retail market?