Retail Availability Holds Steady as Rents Rise

Executive Summary

• Average retail asking rent increased by 2.4% year-over-year to $24.79 per sq. ft., supported by historically low construction completions and four consecutive quarters of positive net absorption.
• The retail availability rate was unchanged at 4.9% in Q2, as retailers continued to favor new construction over outdated supply. 
• Sun Belt markets accounted for most of the new construction activity in Q2, along with Midwestern markets like Chicago and St. Louis. 
• While Sun Belt markets continued to dominate new construction, net absorption in Q2 was led by Boston and Los Angeles due to aggressive expansion by grocery and apparel retailers in those cities’ downtown cores.