United States | Retail Outlook Q3 2022
Retail maintains ground despite economic headwinds
- Keisha Virtue
While inflation is a concern for consumers, spending plans for the holidays remain largely intact. Retail property fundamentals remain rock solid in the third quarter, as retailers continue to open more stores than they close.
Despite worries over rising prices, shoppers plan to spend about as much as they did last year.
U.S. net absorption was positive for the seventh straight quarter, totaling 17 million square feet. Leasing activity has also remained robust in recent quarters, surpassing 250 million square feet over the last 12 months.
After comprising 8%-10% of retail leasing activity each year since 2015, experiential tenants now make up 15% of all leasing activity since the start of the year.
Vacant mall anchor space is being transformed into mixed use projects with hotel, multifamily, retail and office components.
Multitenant retail capital market activity significantly outperformed relative to the rest of the market, bolstered by a handful of large transactions that closed in early Q3.