Despite expecting an economic slowdown here because of the area's ties to the aerospace industry, Gregory Wendelken, regional manager for Marcus & Millichap, says the Puget Sound retail market has survived massive Boeing layoffs in the past and "will weather the storm."

Wendelken cites a "steady reduction in retail construction activity over the past few years" as keeping supply for properties below demand levels. According to the report, new construction activity is expected to drop for the third year in a row, with starts falling below two million square feet. Over the next 12-month period, Marcus & Millichap believes new starts will be down 18% over the previous one-year period, dipping to 1.6 million sf.

The report also estimates 1.8 million sf of new product will come online. Of that, about 40% is built-to-suit space for single tenants.