WASHINGTON, March 20, 2014 /PRNewswire/ -- Cassidy Turley, a leading commercial real estate services provider in the U.S., has released its Spring 2014 Retail Review, which notes strong improvement in most retail product types and markets over the past 12 months but marked performance variations in Class A, B and C properties.
The report indicates an improved retail climate, including national retail vacancy at 8.6% at the end of 2013, down from 9.5% at the end of 2012, with 37.8 million square feet of occupancy growth and 17 million square feet of new retail property deliveries. The report includes regional and metro summaries as well for the Top 60 U.S. markets.
"If 2013 was the year we saw 17 million square feet of new deliveries, 2014 is likely to see those numbers come in somewhere near 20 million square feet when all is said and done," said Garrick Grown, Director of Research at Cassidy Turley. "And, we also expect strong levels of occupancy upon delivery for these projects. That is for two basic reasons: new centers simply aren't going forward without heavy pre-leasing commitments in place and demand for new product is robust."
Highlights for the sector's property types include:
Community/Neighborhood/Strip Center vacancy fell to 10% from 10.7% a year prior and 11.2% at the 2010 trough. The traditional mix of grocery and drug anchors and restaurants and retail services will bolster this segment in 2014, especially for Class A and B properties, but Class C properties, especially unanchored strip centers will continue to suffer.
Power/Neighborhood Center held steady in 2013 and closed the year with 6% vacancy, defying the odds as many big-box stores shrunk their footprints and contracted store locations, with a few exceptions. Smart landlords have adapted to emerging trends and focused development and redevelopment on junior boxes under 40,000 square feet where there is a solid pipeline of expanding retailers. Most new power centers delivered substantially preleased, and Cassidy Turley is tracking 1.6 million square feet of new power center development in the Top 60 markets in 2014.
Mall vacancy closed the year at 4.5% with a wide gap between Class A and Class C product and Class B owners getting squeezed to compete with prime properties. Class A vacancy is estimated at 2%, while Class C vacancy is estimated at 10%. Like power center owners, leading mall owners are adapting and shifting tenant mixes to accommodate more entertainment and restaurant tenants.
Outlets/Lifestyle Centers tell a similar story to malls. Class A outlet centers and malls were at 4% and 5% vacancy, respectively, at the end of 2013, while the overall sector was at 7.4%. The overwhelming majority of new development is in the outlet subsector – 4 million square feet of the 4.5 million square foot total – and occupancy improvement will continue to be driven by outlet center performance.
Follow this link to download the full report.
About Cassidy Turley
Cassidy Turley is a leading commercial real estate services provider with more than 4,000 professionals in more than 60 offices nationwide. With headquarters in Washington, DC, the company represents a wide range of clients—from small businesses to Fortune 500 companies, from local non-profits to major institutions. The firm completed transactions valued at $25.8 billion in 2013, manages approximately 400 million square feet on behalf of institutional, corporate and private clients and supports more than 24,000 domestic corporate services locations. Cassidy Turley serves owners, investors and tenants with a full spectrum of integrated commercial real estate services—including capital markets, tenant representation, corporate services, project leasing, property management, project and development services, and research and consulting. Cassidy Turley enhances its global service delivery outside North America through a partnership with GVA, giving clients access to commercial real estate professionals in 65 international markets. Please visit www.cassidyturley.com for more information about Cassidy Turley.
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