Retail Market Forecast 2009
The new retail space delivered in 2008 was by 11.6% lower from the 29.7 million sq. ft. delivered in 2007, but this reduction in completion was by no means enough to counterbalance the drastic drop in demand. As a result of the weakening demand and the rising vacancy rate retail space registered an average decline of 2%. The NAR/TWR retail market forecast predicts even more negative developments for the US retail space market in 2009. In particular, it is predicted that net absorption will be by far more negative with occupied retail space declining by 49.7 million sq. ft. Completions of new retail space are expected to drop drastically in 2009 to only 5.8 million sq. ft. (77.7% drop) but given the significant negative absorption, the national retail vacancy rate is expected to jump by more than 3 percentage points to 13% (from 9.7% in 2008). This big increase in the vacancy rate is expected to put significant pressure on landlords and force them to reduce rents for retail space by as much as 9%.
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