Shifting retail location strategies and high financing and construction costs are shaking up demand for space.
In the second quarter, just 5.9 million square feet of retail space was constructed, the third-lowest quarterly total in a decade, according to CBRE. “The retail development pipeline will likely remain slow, as the market contends with economic uncertainty and elevated construction materials costs,” researchers said in the report.
High office vacancies are dampening demand for retail space in core areas of some cities, though even in places like San Francisco, where retailers are fleeing downtown shopping districts, neighborhoods are thriving, according to Nick Egelanian, president of retail development firm SiteWorks.
