These five markets are surging…
Retail real estate deal volume in the Northeast has historically been high. But new regions are gaining steam in a disrupted retail market.
That’s according to a quarterly update from Ten-X Commercial, a transaction platform powering online commercial real estate sales. The report, Ten-X’s “Spring 2019 U.S. Retail Market Outlook,” identified Austin, Texas; San Francisco; Dallas; Salt Lake City; and San Antonio, Texas as the top five ‘buy’ markets for spring 2019. The five markets have all seen rent gains and lower vacancy rates, noted Ten-X.
“Overall, the Southwest region exhibits better buyer demographics and stronger economies, which provide a boost to traditional retail,” the company said.
Meanwhile, Milwaukee; Pittsburgh; Northern New Jersey; Philadelphia; and Memphis have been classified by Ten-X as the top five ‘sell’ markets. These areas have seen weak rents and higher vacancy rates, and will likely struggle through 2022, according to Ten-X.
“While the rise of e-commerce is hurting brick and mortar retailers everywhere, some areas of the retail market are holding up better, as retail deal volume has increased in the south and southwest metros,” said Ten-X chief economist Peter Muoio.
The report found that retail vacancy rates have remained stagnant at 10.2% since 2018 and are projected to remain at this level through 2019. Many retail property buyers appear to be looking for redevelopment and repositioning investments.
“Despite continued weakness in the overall retail sector, investor sentiment is stronger than it was last year,” said Ten-X chief economist Peter Muoio. “Given the trend toward retail repositioning and development, investor activity in the sector could remain strong even as fundamentals struggle.”
For example, Seritage Growth Properties purchased 235 Sears stores in 2015, converting the vacant spaces into offices, apartments and restaurants.
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