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U.S. Retail Sector Continues to Weaken, E-Commerce Increases Market Share, Drags Down Fundamentals
Ten-X Commercial released its latest U.S. Retail Market Outlook, including the top five ‘Buy’ and ‘Sell’ markets for retail real estate assets. The long-term forecast concludes that retail’s long and slow recovery, already a laggard compared to other CRE segments, is definitively sputtering to a halt. Overall investment in retail properties fell to $15.3 billion in Q4 2017, a 19% plunge from a year earlier.
Ten-X Chief Economist Peter Muoio says, “In terms of brick-and-mortar stores and the real estate that supports it, the phrase ‘retail apocalypse’ is no hyperbole. Store footprints are continuing to shrink, and we are seeing droves of traditional retail assets being repurposed or simply demolished.”
The report notes that Austin, Denver, Dallas, Houston and Salt Lake City are markets where investors should consider buying retail assets. These areas, clustered in the Southwest, benefit from expanding populations, job and wage growth, and increasing shopper counts, which partially offsets the powerful forces working against traditional retail nationwide and globally.
Detroit, Kansas City, Chicago, Northern New Jersey and Memphis are the top markets in which investors might consider selling retail properties, according to Ten-X. These cities face adverse retailing conditions linked to poor local economic indicators, which may include lack of population growth, tepid job growth, or simply an overabundance of new supply.
For comments, questions or concerns, please contact Dennis Kaiser
