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May | June | 2014 CCIM.com
by Beth Mattson-Teig
D
evelopers that have been chomping at the bit to break ground
on new retail projects are beginning to see a glimmer of hope
as retailers accelerate expansion plans.
By all accounts, retail development has remained fairly
anemic in the past f ve years. Retail construction at the peak of the mar-
ket in 2005 and 2006 reached nearly 245 million square feet each year.
Development over the past f ve years has been a fraction of that pace with
annual construction below 50 million sf. New completions totaled 41.5
million sf last year, according to Marcus & Millichap. "So, we are still
way of pace by historical standards," says Bill Rose, national director
of the National Retail Group and the Net Leased Properties Group for
Marcus & Millichap in Calabasas, Calif.
Although retail construction has been slow to return as the market
has worked to absorb excess space, the pipeline of projects is growing.
Marcus & Millichap predicts that retail completions will creep higher to
56 million sf this year, while vacancies are expected to improve a further
70 basis points to reach 6.5 percent by year-end. Retailers and restaurants
?
Retailers
consider the costs of
new construction.
mbbirdy/Getty
Images
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