The Forces Driving Retail and Industrial CRE
Retail Sector Stays Tight, Industrial Adjusting to Supply Surge
Retail Market Exhibits Long-Term Stability
Retail property performance has undergone minimal changes since the pandemic, with overall vacancy holding steady and asking rent growth remaining positive, but slow
The 2024 U.S. retail pipeline is limited, minimizing future supply-side risk
Retail demand momentum is strongest across the sun belt; but several other metros — like Indianapolis, Salt Lake City and Northern New Jersey — are also exhibiting strong performance
Industrial Supply-Side Pressures Are Gradually Easing
Record-level industrial construction has coincided with slowing demand over the last two years, lifting the national vacancy rate and flattening rent growth
The pace of construction is slowing, pairing with increased consumption and eCommerce sales to provide the runway for the industrial supply overhang to be absorbed over time
Development is concentrated across several metros, hinting at bifurcating performance metrics between heavily- and lightly-supplied markets
Construction Trends Are Key To Sector Performance
Meager retail construction and the slowing pace of industrial development will underpin performance trends in each sector moving forward
Other variables, such as retail sales, interest rates, job creation, wage growth and consumer sentiment will also influence space demand from tenants
*Through 3Q
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
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