In this article and accompanying video, CoStar’s Drew Myers, Senior Consultant, and Galina Alexeenko, Managing Director, discuss indicators that show that U.S. retail real estate is bursting at the seams.
CoStar’s Drew Myers and Galina Alexeenko See tight space even as big names close stores.
The national retail vacancy rate fell to 4.4 percent, its lowest level in more than a dozen years, in the final quarter of 2018, even though retailers leased space in U.S. malls at the slowest pace since the Great Recession.
It's the latest sign that big-box store closings haven't battered the industry's overall real estate occupancy. But those closings have widened the divide between struggling and thriving retail centers.
Smaller, well-located strip shopping centers anchored by necessity-based retailers such as groceries generally are having no problem keeping spaces filled.
CoStar analysts expect retail vacancies to stay tight well into this year and beyond, as construction remains sparse.
Retail property sales reached $170 billion last year, the highest annual level recorded by CoStar.