Single-tenant retail is continuing to perform well as consumer foot traffic and spending in brick-and-mortar stores has heated up, with vacancy nearly matching year-end 2019 rates at 4.6% in April.
New research from Marcus & Millichap notes that tenants absorbed more than 68 million square feet over the twelve-month period ending in March, and analysts say further vacancy compression is "probable" if tenants resume expansion plans and backfill existing space.
"Despite inflation and rising fuel prices, during the early months of 2022 retail spending gains have been widely distributed across store-based segments, which excludes purchases made online or at bars and restaurants. This suggests a broader shift in consumer behavior is ongoing, one with an emphasis on physical locations," the report notes.
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