Dear clients, partners and friends,
ICSC Las Vegas, the largest retail real estate conference in North America, took place in May. More than 30,000 retailers and real estate professionals came together to discuss specific markets and opportunities, as well as national retail trends. Here is a recap of the topics discussed:
Consumer spending remains steady: Despite high prices and high borrowing costs, consumer spending has remained relatively steady. U.S. retail sales declined in January but recovered solidly in February and March. As a result, demand for retail space continues to be strong, and the market is starting to see an uptick in new developer-built retail locations coming online.
Record-low vacancies: Retail’s main issue isn’t excess vacant space but a shortage of desirable space. Steady demand for retail space has resulted in record-low vacancy rates, which is a positive sign for investors/landlords. While it provides greater confidence in long-term leases and the ability to re-lease vacant buildings, it also means more competition for less space, which is pushing retail rents higher.
Sale-leaseback activity picks up: With rents rising and traditional financing remaining a challenge, retailers – particularly those looking to grow their real estate footprint – will be seeking new ways to access capital. This will likely contribute to greater demand for “sale-leasebacks,” where a company sells its real estate to an investor for cash and simultaneously enters into a long-term lease, unlocking the capital needed to grow, hire and expand.
Brick-and-mortar: While the percentage of U.S. e-commerce sales continues to increase, consumers are still eager to return to physical stores. However, not all retail segments are created equal. There’s increased leasing demand in segments like food services, c-stores, discount/off-price, experiential, and healthcare. However, movie theaters, grocery, fitness centers, and furniture stores, among others are seeing a decline in leasing demand. Click on the National Retail Market Report below for more real-time market data and insights.
NAI Pfefferle has more than 60 retail properties listed for sale and/or lease throughout the state of Wisconsin. Don’t hesitate to reach out if you have questions about this or other CRE segments.
Sincerely,
Manny Vasquez, Partner/VP of Business Development
mannyv@naipfefferle.com
Disclaimer: NAI Pfefferle cannot guarantee the completeness or absolute accuracy of the commercial real estate data provided. Information such as property values, rental rates, vacancies, and other market trends may fluctuate and is subject to change without notice. Users are advised to independently verify all data and consult with our team of qualified real estate professionals for specific advice tailored to their needs. NAI Pfefferle is not a licensed or certified real estate appraiser, and any information provided does not constitute an appraisal as defined under any federal, state or local laws. The conclusions presented in this report are estimates only and shall not be construed as a representation or warranty. NAI Pfefferle shall have any liability to any third party as a result of reliance on or use of the information, analysis and conclusions contained herein.
