MarketScoop: Retail Markets Heating Up
Retail Markets Heating Up
Changing Market Conditions Impacting Average Asking Rents in Select U.S. Metro Areas
Retail markets across the U.S. are shifting. As conditions change, it is no surprise to see asking rents adjust accordingly. At mid-year 2017, some markets remain fully entrenched in a landlord-favorable environment - vacancies and construction levels are low, and building owners are able to ask premium rents for the few spaces available in the market. As supply-demand dynamics shift, we are seeing an increase in availabilities, and landlords may consider dropping rents to make their offerings more competitive and attractive to potential tenants.
At mid-year, New York City held the top spot as the U.S.’s priciest retail market. But due to shifting conditions, we have seen some significant movement in rents across various cities – especially in the California and Florida markets. Over the next 6 to 12 months, investors and tenants alike should be watching rent trends in their specific markets of interest. As rents fall in certain areas, tenants may be able to favorably time their renewals or new lease commitments. Investors, on the other hand, will be watching movement in rents, among many other factors, to help them time their buy and sell decisions.
|Most Expensive Retail Markets
|New York City, NY||$43.56|
|San Francisco, CA||$41.31|
|San Jose, CA||$35.77|
|Top Markets for Annual Rent Growth/Decline|
|San Jose, CA||+7.6%|
|West Palm Beach, FL||+6.8%|
|Oakland/East Bay, CA||+5.3%|
|San Francisco, CA||-3.6%|
Source: Stan Johnson Company Research, CoStar Group
Methodology: Data includes average retail asking rents (NNN) for the top 200 U.S. markets as of Q2 2017