US Retail Market Forecast May 2009Given the poor performance of the market in 2008, completions of new retail space in 2009 are predicted to decrease by more than 50% and specifically from 26.2 million square feet in 2008 to 11.9 million square feet this year. In 2010, NAR/TWR expect the completion of 19.6 million square feet of new retail space, which represents a significant increase compared to 2009. Such an increase is not justified by the national picture of a market that continues to deteriorate, and it may be due to large projects that are already under construction and scheduled to be completed by the end of 2010. The NAR/TWR retail market forecast May 2009 certainly does not present a healthy picture for the US retail market in 2010, which, as indicated, will be marked by very high negative absorption, a 15% vacancy rate and declining rents. However, it should be noted that retail market behavior varies widely across local markets and, within this context, many local markets are likely to deviate significantly from average national performance. Furthermore, retail market behavior varies considerably across different retail format types (regional centers, community centers, neighborhood centers, power centers, etc.). For some format types, like neighborhood and community centers, retail property performance is highly localized. Thus, the national outlook presented by NAR/TWR can not be applied to any particular locality. Investors need to evaluate carefully the prospects of the market as they pertain to the particular locality and retail format type under consideration.
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