Welcome back to another blog post. Today we are looking at the current start of retial spaces accross the nation and how retail leasing is still red hot in certian areas.

Today we read an intersting article that shows retail property owners are not disappointed when certain retail stores go bankrupt. They are more excited about the opportunity. “If you have to get space back in a bankruptcy, today is a good time to have that happen,” said the CEO of Levin Management. How interesting.

Now lets take a step back and see why might today be a good time for retail property owners. The biggest reason can be contributed to the lack of supply in the market. In the first quarter development of retail space has fallen to 9.5 million sqft. Back in 2008 the first quarter saw developers build 80 million sqft of retail space.

To add on top of the little development towards retail space, 155 million sqft of space was demolished over the past half decade. Of course, both factors contribute to a decrease in supply and can ultimately drive up rents.

At this point you might ask yourself, if retail is so strong why do I still see vacant spaces when I drive around town. I think that this is a great question and one that I ask too. To asnwer this, we believe that this has to do with the type of retail centers the vacant spaces are located. As we all know, enclosed low-end strips/malls are not the best place to shop for many reasons. Also, online retailers are still making their mark on the overall industry driving business away from these less desirable stores.

Overall, a very interesting time to be in retail real estate. If you are, our thought would be to target more luxury brands and open air shopping centers. This seems to be the best and most desirable properties on the market today.

Ok, that’s it for today.

Thank you,

The Nest Journal

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