Development in the retail market was hampered by high construction costs during the second quarter, prompting retail developers to favor high-rent or high-growth markets to get the price down, according to CBRE's Q2 retail report. Construction costs for new retail range from $400 to $500 per square foot, and few markets command rent sufficient to justify that expense.

Construction completions slowed by 35% quarter-over-quarter to 4.5 million square feet, the lowest level in more than a decade. Rolling four-quarter retail completions totaled less than 30 million square feet, down from 32 million square feet during the first quarter, according to the report.

Power centers and malls and lifestyle centers delivered just 36 and 26 percent of their 10-year average quarterly totals during the second quarter. Rolling four-quarter deliveries of new single-tenant properties totaled 19.4 million square feet, about two-thirds of the 10-year quarterly average.