CHARLOTTE—Slowly recovering, that’s the word on the retail front in Charlotte, according to the Marcus & Millichap’s 2012 Market Outlook.

Limited construction and large lease signings will allow the Charlotte metro to post positive absorption in 2012, M&M predicts. Meanwhile, the firm expects multi-tenant velocity to pick up thanks to out-of-state sellers handing off stabilized shopping centers and risk-averse buyers targeting single-tenant properties.

“With little movement on the development front, smart owners of existing centers are utilizing capital to retain signature tenants and attract new retail concepts,” Susan McGuire, principal at CNL Crosland, tells GlobeSt.com. “They are making their asset stronger and working with tenants to ‘right-size’ their space.”

Indeed, only about 300,000 square feet of retail space will come online in Charlotte in 2012, expanding the inventory by a meager 0.3 percent, M&M reports. Vacancy rates will dip 60 basis points to 8.4% in 2012 while rents climb 1.6% to $17.56 per square foot.

M&M predicts institutional operators looking to reposition assets will list performing shopping centers with a national anchor and solid tenant roster at cap rates near 7.5% while REITs and private buyers seeking higher cash-on cash returns will finance these investment-grade products to expand their portfolios.

Finally, as conditions tighten, owners will invest in minor upgrades to facilitate higher rents over the next five years, according to Marcus & Millichap’s report. At the same time, the firm expects 1031-exchange buyers to disperse their equity into single-tenant buildings near major transit corridors as a hedge against inflation.