2021 recorded the most net new retail space leased since 2016
Based on new data from CBRE, the U.S. retail market came back significantly in 2021, recording 99 million square feet of positive absorption, the highest total since 2016.
Last year’s rebound indicates a broader recovery for the retail market, which posted a negative net absorption in 2020. Absorption measures the net value of Square Feet footage rented or vacated in a particular period; a positive reading means more space is newly rented than free.
“The retail recovery is in full swing,” said Bill Wright, Chief Executive Officer and Retail Manager for CBRE. “We are seeing strong demand along with very little new supply, which has brought real balance back to the market. All indications are that performance remains very strong in 2022 as many retailers seek to take advantage of the market to meet increased demand. of the consumer for physical retail. “
This performance pushed availability down to 5.6 percent, a 10-year low. With construction completing at its lowest level in a decade, key spaces have become difficult. As a result, rents rose 1.6% year-over-year to $ 21.87 per square foot.
Other Retail Market Highlights include:
• 23.5 million square feet were delivered in 2021, a 36 percent decrease since 2020.
• Power centers performed well in 2021, tying a four-year low availability rate of 6.4 percent.
• Lifestyle & Mall was the only category that recorded negative absorption in 2021. While Class A malls remain strong, lower Class B and C malls are starting to lose tenants to outdoor malls.