DayBreaker

CBRE forecasts retail real estate rebound in 2018

BY Al Urbanski

Headlines continue to focus on the deceleration of traditional retail powers like Macy’s and J.C. Penney instead of the acceleration of on-trend value and fashion brands like Ross Dress for Less and H&M, according to CBRE senior managing director for retail Todd Caruso.

“The U.S. retail industry is evolving rapidly, but it isn’t receding,” said Caruso in releasing a 2018 market forecast that augurs well for non-gateway markets, off-price retailers, and restaurant and entertainment operators.

CBRE predicts retail rent growth of at least 2.5% in markets such as Atlanta, Houston, Nashville, and Denver that are experiencing job and population growth.

Across the retail spectrum, CBRE envisions landlords becoming more collaborative in the success of their retailers by sharing data, setting aside space for pop-up shops, and even taking equity stakes in retail start-ups in exchange for lower rents and occupancy costs.

The international real estate services and investment firm predicts, too, that the retail segment will draw more attention from opportunistic investors willing to redevelop and reposition failing centers.

Overall indicators bode well for a retail rebound in 2018, according to Brandon Famous, CBRE’s retail leader for the Americas.

“This year has started strongly for retailers and owners of retail centers, given the momentum generated by a robust holiday season, low unemployment and healthy consumer confidence,” Famous said.

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