The insatiable demand for retail space outran construction from 2015 and well into 2016, resulting in higher rents and compressed vacancies. This demand and supply dynamic uncorked a property development boom heeding the needs for specialized retail spaces.
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For instance, there has been an emphasis on necessity-driven retail spaces, such as groceries and service centers. Small neighborhood centers are finding currency and drawing in the residential crowds, especially in cities like New Jersey and South Florida. Power centers are also ruling construction, and lend evidence to evolving lifestyle needs in communities.
Since 2006, U.S. retail construction had never been more in the pink of health than now. 2006 is the baseline year for falling demand, but this decade has steadily picked up. In 2015, 82 million square feet of retail space were constructed, in contrast to a surprisingly low vacancy rate of 5.8 percent. Such upbeat pace is a far cry from fluctuating construction post-2006 when only 59 million square feet were constructed, representing a perilous drop of 77 percent from peak levels.
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Today, construction is unabated, with nearing 85 million square feet of retail space projected to come out of the last two years. The bulk of new construction is concentrated on five markets, namely, New Jersey, South Florida, Houston, Dallas-Fort Worth, and Boston. Existing developments also include repurposing, repositioning, and expanding properties to upgrade environments and cater to an evolving set of clientele.
Benderson Development Company, Inc. owns and manages a diverse array of real estate holdings across 38 states. It is a leading property management firm recognized by the industry for its commitment to service excellence. For more news about property development, visit this Twitter page.
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