Following a recent string of relentlessly unexciting market trends in retail real estate over the past several quarters comes this distinctly positive news for retail property owners — quoted asking rents have finally turned upward across all retail property types in the U.S. for the first time since 2008.
“This is a symbolic victory,” said CoStar real estate economist Ryan McCullough, who co-presented the First-Quarter 2013 Retail Review and Outlook with Suzanne Mulvee, director of U.S. research, retail for Property and Portfolio Research (PPR), CoStar’s analytics and economic forecasting company.
This reversal of bad fortune for landlords, which started with rental rate increases in higher-end institutional retail and a few scattered metros of several quarters ago, is the culmination of 2 ½ years of steady fundamentals recovery in retail, he said.
“We’re finally to the point where the average asset is showing steady rent growth again,” McCullough said.
Mulvee made note that the 70% of U.S. retail markets that reported positive rent growth during the first quarter represents “a true turning point for the market” into a broad-based recovery.
Without getting too carried away, it should be clearly noted that plenty of challenges remain for owners, tenants and retailers. Rents aren’t going to shoot upward and fundamentals are continuing to improve slowly or move sideways.
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