Retail construction hits record lows, making it hard to find space
Recently, retailers have had a hard time finding space in which to put new stores. The problem is that there are not a lot of buildings going up to begin with. Retail construction completions fell to 5.7 million square feet in the second quarter, setting record lows for both quarterly and rolling four-quarter totals, according to CBRE.
Retail construction completions reached a record low of 5.7 million square feet in the second quarter, according to CBRE, one of the largest commercial real estate firms. The firm attributes this decline to rising construction costs and labor shortages. As a result, the availability of retail space has been extremely tight, with retail space availability holding at a minuscule 4.9% in the second quarter, as reported by the real estate firm.
This scarcity of retail space has made it incredibly challenging for expansion-minded retailers to find desirable, well-located properties. Ebere Anokute, CBRE's Americas head of retail research, who previously worked as a real estate manager for Warby Parker, commented on the situation, stating that retailers are now exhibiting a "major flight to quality" in the industry. He added that companies are less inclined to move into older or lower-cost properties.
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