Zach Roesinger’s Post

HOW TO TELL IF WE ARE ENTERING A "LANDLORD MARKET"... 📉 Retail recalibration: Retail bankruptcies and closures have reset the U.S. retail market. 🏬 Record-low vacancies: U.S. retail vacancy rates have hit a record low of 4.1% in Q1 2024. 🚧 Demolition surge: 155M SF of retail space demolished over the past five years. 🏢 New developments: Minimal new retail space added; only 500M SF in the last decade. 🛑 Tight market: Retail space is scarce, making it difficult for tenants to find affordable space. 💵 Rent growth: Nationwide asking rents up by 2.9%, reaching a new high of $25 per SF. 🔄 Landlord’s market: Transition from a tenants’ market to a landlord’s market. 🏗️ Construction slowdown: Retail construction activity has fallen by two-thirds since the Great Financial Crisis. 💼 Non-retail occupancy: Increase in non-retail uses, such as healthcare, occupying former retail spaces. 📈 Retail demand: Retailers emerged strong from Covid-19 with aggressive growth plans, leading to competition for limited space. ⛔ Expansion limits: Rising costs and limited space are capping retail expansion. 📉 Future outlook: New retail space deliveries expected to remain low until at least 2028. 🔍 Market caution: High interest rates, construction costs, and shadow inventory are holding back retail development. 🛒 Competition: Struggling retailers and competitive product impact new retail developments. #RetailRecalibration #RetailMarket #CommercialRealEstate #RetailVacancy #RetailDemolition #RetailDevelopment #RetailSpace #RetailTrends #RealEstateNews #RetailGrowth #RetailExpansion #CRE https://lnkd.in/grAwrEmC

In Denver, retail availability has reached a historic low of 4.6%, below the 10-year average of 5.6%. New construction is limited, primarily consisting of standalone build-to-suits. This cautious approach has resulted in retail inventory growing at the slowest rate among major asset types, helping restore balance in the Denver market. Cap rates in this segment, although generally low, have increased by about half a percentage point since early 2022, now averaging in the low-5% range. High-value transactions above $5 million are few, with recent large deals focusing on value-added opportunities with higher cap rates due to increased risk and management demands. Looking ahead, Denver's retail market is expected to remain tight through 2024 due to limited new construction and sustained positive demand. Retail sales growth has been strong, indicating retailers are optimizing efficiency in this evolving sector. Source: CoStar Group #Denver #CRE #Investments #CapRates #Retail

📊 #MondayMarketUpdate: Sullivan County Retail Market Insights As of this week, the Sullivan County retail submarket shows a vacancy rate of 3.0%, reflecting a slight increase of 0.7% from last year. Despite these changes, there's active movement in the market: Current Rents: Averaging at $13.60 per square foot, marking a 4.1% increase over the past 12 months. Construction: Approximately 21,000 square feet is under construction, promising new opportunities. Sales Activity: The past year has seen 41 sales transactions totaling about $37.9 million, covering 310,000 square feet of retail space. Sector Breakdown: General Retail: Stands strong with a low vacancy rate of 1.1%, although it faced 11,000 SF of negative absorption. Malls: Face challenges with a high vacancy of 17.5% and 5,000 SF of negative absorption. Power Centers: Remain resilient with a 1.8% vacancy and 10,000 SF of negative absorption. Strip Centers: Slightly increased to a 3.1% vacancy, with 7,000 SF of negative absorption. Neighborhood Centers: Noted a vacancy rate of 5.4% and the most significant negative absorption at 36,000 SF. Other Retail Buildings: Maintained a steady pace with a 6.0% vacancy and flat absorption. The Sullivan County retail submarket is evolving, and these insights could help navigate your investment and leasing strategies. Stay tuned for more updates! #HurdCommercialGroup #CommercialRealEstate #SullivanCounty #RetailMarket #RealEstateTrends

A green shoot in a challenging CRE market. In a separate article, there were more retail store openings than closures in 2023, another positive sign. In a noteworthy shift, major investment firms are revisiting retail real estate, signaling a potential resurgence for a sector that has faced challenges in recent years. This renewed interest is driven by several factors, including the recession-resilient nature of certain retail segments and the changing dynamics of commercial real estate. Key Points: Institutional Interest Resurfaces: Institutional investors, traditionally wary of retail, are now giving the sector a fresh look, attracted by the performance of recession-resilient stores like grocery stores and pharmacies. Shift from Traditional Assets: Private-equity funds, especially, are redirecting their attention towards retail as industrial and multifamily real estate become increasingly expensive, creating a shift in investment focus. Commercial Property Sales Slowdown: Overall commercial property sales, including retail, have experienced a significant slowdown since the Federal Reserve raised interest rates. However, private investors, including family offices and small firms, continue to dominate acquisitions. Perception Reversal: Institutional buyers were previously hesitant due to the declining value of enclosed malls, leading to a broad-brush negative perception of the entire retail sector. However, changing market conditions are prompting a reassessment. Blue Owl Capital Leads Institutional Buyers: New York-based Blue Owl Capital is identified as the largest institutional buyer in 2023, focusing on resilient retail assets such as free-standing grocery stores, pharmacies, and auto-part retailers. Market Fundamentals and Immediate Returns: Chicago-based Temerity Strategic Partners (TSP) highlights the strong fundamentals of the retail sector. TSP, in collaboration with DLC, plans to invest up to $2 billion in retail acquisitions over the next three years, citing immediate returns on open-air retail purchases. Resilience Post-Pandemic: Retail has proven resilient post-pandemic, with shoppers returning to physical stores and fewer bankruptcies among retailers. The sector's stability, coupled with limited new retail construction in recent years, has contributed to low vacancy rates and increased rent prices. In conclusion, the revival of interest from institutional investors and private equity funds, coupled with the resilience of specific retail segments, suggests a positive outlook for retail real estate. This shift reflects changing dynamics in the broader commercial real estate landscape, with retail emerging as an attractive option amid economic shifts and evolving consumer behavior. #wsj #realestatefinance #retailrealestate #economy #icsc #cmbs #covid https://lnkd.in/e6E8rU-K

State of the Denver Retail Market: -- Low vacancy rates keep Denver retail in a position of strength. -- Historically tight Retail availability due to little competitive space – 2.5% Vacancy Rate. -- Retail is performing stronger around newer multi-family projects. -- Downtown rents have constricted due to increasing vacancies. -- Out-of-State buyers remain active in Denver showing national confidence in Denver’s resiliency. -- Large institutional buyers and REITs have largely retreated from the market. -- 80% of Sales in past year have been Private Capital. -- Retail Strip Centers remain the most sought after investment properties for private Investors. Contact CW Real Estate Partners to learn more about the current state of the Denver Retail Market and how we can help you navigate the market to benefit your investment strategies. #stateofthemarket #retailrealestate #retailmarket #capitalmarkets #coloradorealestate #denverrealestate #commercialrealestate #investmentrealestate

🚀 Retail Market Insights Q2 2024: Navigating Opportunities and Challenges As we navigate through 2024, the retail market continues to exhibit resilience and adaptability. Here's a snapshot of key trends from the latest reports: 🌟 National Overview: Consumer Spending: Despite slower growth rates, consumer spending remains strong, supported by gains in real income and employment . Vacancy Rates: The national retail vacancy rate remains at a historic low of 5.3%, showcasing a tight market with steady demand . Absorption and Demand: After a challenging Q1, net absorption turned positive in Q2 with 1.4 million sq ft absorbed, although demand is lower compared to last year . 🏙️ Austin Market Highlights: Low Vacancy and Rising Rents: Austin ranks among the 10 least vacant major U.S. markets, with single-tenant vacancy rates below 3% and rents growing at 6.7% annually Construction and Growth: New projects, such as the H-E-B supermarket in South Austin, highlight the city's robust construction activity and job growth Suburban Growth: Suburbs like Cedar Park and Round Rock are seeing significant growth, driven by low vacancy rates and increasing rents 🔍 Market Outlook: The retail market is poised to remain tight with constrained supply and diverse tenant demand, projecting strength into 2025 Retailers and investors should continue to watch for opportunities in this dynamic environment. Let's continue to adapt and innovate in the face of evolving market conditions! #RetailMarket #RealEstate #MarketTrends #AustinRetail #ConsumerSpending #CommercialRealEstate

“The reports of my death are greatly exaggerated,” said Mark Twain in response to reading his own obituary. If retail real estate could speak, it might say the same. The retail sector, much unloved and out-of-favor in recent years, was the best-performing core real estate sector in Q3 and Q4 of 2023, according to Altus Group. What drove retail rent growth in Q4?? ✔️ Retail supply has declined dramatically over the last decade. Availability hit a record low in Q4, according to CBRE. ✔️ Vacancy rates for retail commercial real estate continued to trend downward, as stores benefitted from strong consumer spending and wage growth. ✔️ Open-air shopping centers, often anchored by a grocery store, continued to see strong demand from consumers. If you are interested in investing in diversified real estate portfolios, we invite you to contact us! -- #realassets #investing #realassetsinvestments #realestatemarket --

Necessity retail real estate is historically strong! With U.S. shopping center vacancies falling to just 5.3% in Q4 2023, landlords are seeing high tenant demand for any remaining vacant space.    The Wall Street Journal subscribers can read more from Jim Dillavou, our National Head of Retail Investments & Retail Capital Markets, and the demand for prime retail space in Kate King’s coverage here: https://lnkd.in/eC3sZtVg    #Retail #RealEstate 

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.

“Bankruptcies Have Left More Stores Vacant, but the Space Doesn’t Sit Empty for Long” The Wall Street Journal article posted in the comments below 👇highlights the paradoxical opportunity in retail real estate amid rising bankruptcies. Economic Factors: Despite high interest rates and inflation affecting spending and causing bankruptcies, the retail sector is recovering strongly compared to the post-2008 period. Current Retail Environment: Despite rising bankruptcies, retail spaces remain occupied due to near-record low availability, driven by limited new construction and high demolition rates. The U.S. retail vacancy rate is just 4.1%, reflecting strong demand. Replacement Tenants: Landlords easily replace retail closures with profitable tenants who pay higher rents and attract more customers. Avoiding subdividing: Strong demand for retail space means landlords often avoid the costly and time-consuming process of subdividing vacated areas. Limited new construction: Building new retail space is unfeasible due to high land, construction, and labor costs. Kimco Realty Corporation (NYSE: KIM) notes that rents need to rise nearly 35% to justify new supply. 💡 Where do you identify opportunities in retail real estate? Share your thoughts in the comments below 👇! Please like 👍, comment below 👇, or share 👉. Click the 🔔 in my profile to get notified of my posts. And follow me for more content like this. #retailrealestate #commercialrealestate