US Retail Market Predicted to Continue Deteriorating in 2010
According to the forecast, the US retail property market will continue to soften in 2010 with rising vacancy rates and declining rents. For the fourth quarter of 2009, NAR and CBRE-EA predict that the national retail vacancy rate will rise to 12.6%, bringing the estimated national average for the year to 11.9%. The latter will represent a 220 basis point increase compared to the 2008 average retail vacancy of 9.7%. The increase in the average vacancy in the US retail market in Q4 2009 is expected to be driven by a 4.4 million square feet decrease in the nation's retail occupied stock (negative net absorption) and an increase in the total retail stock with the completion of 3.3 million square feet of new retail space. With rising vacancies, retail rents are predicted to decrease in Q4 2009 by 0.2%, contributing to a predicted annual rent decline of 1.3% for 2009. NAR and CBRE–EA predict that the US retail market will continue to deteriorate in 2010 with demand, as measured by the occupied stock, declining by an additional 4.7 million square feet, which will represent a significant improvement compared to the total decline in demand in 2009 (see above). The expected completion of an additional 4.2 million square feet of new retail space is expected to further weaken the market and push the national retail vacancy rate by 110 basis points up to 13%. With deteriorating market fundamentals US retail market rents are expected to drop by 3% in 2010. If you have an interesting comment in relation to this article please use the form below Related Posts to submit it. Please read submission guidelines before writing and submitting your comment.
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