According to JLL, the retail sector is experiencing high levels of occupancy and a shortage of new development, making it an attractive opportunity for current owners and investors. With strong fundamentals and long-term rent growth potential, this sector presents a promising investment opportunity.
In the second quarter of 2023, net absorption increased by 12.6%, reaching 10.8 million square feet while deliveries decreased by 5.1%. This resulted in a year-over-year rent growth of 3.6% across all retail asset categories nationwide, bringing the overall average occupancy rate to 95.4%. Additionally, only less than .03% of total inventory is currently under development.
Although Sunbelt markets are seeing significant rent growth rates, secondary and tertiary markets are also performing well with Jacksonville at +12.6%, Phoenix at +9/8%, and Omaha at +9/0% year-over-year.
Senior Managing Director Danny Finkle from JLL Retail Capital Markets stated that this impressive rent growth in both primary as well as secondary/tertiary markets showcases the strength of the retail sector across different regions.”
