LOS ANGELES—A climate of disruptiveness brought on by e-commerce and demographic shifts has varying implications for US retail real estate this year, says CBRE. On the one hand, it will lead to more collaboration between retail tenants and their landlords; on the other, the performance gap between top-tier and lower-rung shopping centers will only widen.
That being said, CBRE anticipates five years of solid rent growth for retail properties in non-gateway markets, thanks to their employment and population growth and their available runway for rent gains. Near term, Atlanta, Houston, Nashville and Denver all are expected to see year-over-year rent gains of at least 2.5% during 2018.
“Successful redevelopment in the urban core and a rise in mixed-use projects in the suburbs, together with strong employment and population growth, make these markets especially attractive to investors,” according to CBRE's 2018 US Real Estate Market Outlook report. “Major gateway markets like Washington, DC and Chicago, where demographic and demand growth are steady but less robust, are expected to see rents grow, but at a more moderate pace.”
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
