As consumer confidence dwindles, retail sales are expected to slow and vacancies in retail centers to rise. Retail sales are predicted to drop to a 5% growth rate, down from an 8% to 9% increase in 2000, according to Marcus & Millichap's report. At the same time, vacancies are expected to rise slightly, especially in unanchored strip centers.
The slowdown in the retail sector will be further compounded by the arrival of new product in 2001. There are approximately 4.5 million-sf of new construction scheduled for completion this year, although most of the projects are pre-leased.
Investors are becoming increasingly cautious, which will substantially slow the sale of retail properties in 2001, the report says. It is a buyer's market, as investors will have ample opportunity to purchase strong retail properties in the upcoming months.
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