LOS ANGELES-A slow, drawn-out recovery is in store for L.A. retail, according to the Jones Lang LaSalle Retail Outlook Report.

The overall US outlook is slightly more upbeat, with JLL predicting that nearly all markets and categories will see moderately rising rents.

“We're not quite there yet, but by the end of this year virtually all (national) markets should see rent growth,” said a statement from Greg Maloney, president and CEO of Jones Lang LaSalle Retail Group. “Quite a few markets are already posting year-over-year growth, including Miami, Fort Lauderdale, Dallas, New York, Tampa, San Francisco, Hawaii, Los Angeles and Boston.” Most of those rent-growth metros are enjoying robust local economies, many driven by energy or high tech employment.

Houston will soon join the list, although it has yet to achieve year-over-year rent growth. Maloney added, “It's important to note that many of the markets that are experiencing robust growth are also the ones that had the steepest decline.”

National averages show retail rents still on the decline, falling a scant 0.2 percent from a year ago, according to JLL's US “Spring Retail Forecast.” Yet rents overall were up 0.3 percent from the previous quarter, providing an early glimmer of a more widespread turnaround.

Increased consumer interest in value retail has already fueled sales and growing store counts for many retailers that specialize in do-it-yourself home or automotive repairs and low-cost consumer goods. The same fervor for value has also pushed outlet centers to the forefront of retail real estate performance, researchers found.

“Outlet center performance has been outstanding in recent years, with developers racing to bring more centers to market to meet growing demand,” said a statement from Kristin Mueller, COO, Jones Lang LaSalle. “The quality of retailers tenanting outlets is becoming more sophisticated and upscale as well,” Mueller said. “Success has enabled outlet landlords to be more picky, and they have more retailers to choose from because even some luxury brands and department stores are dipping their feet into the outlet concept.”

The slow improvement in national real estate fundamentals reflects the slow economic recovery. JLL estimates annualized gross domestic product growth averaged just 1.8% over the past four quarters, with jobless rates at 7.6%. National retail vacancy was down 10 basis points to 6.7% in the first quarters, down 80 basis points from the cyclical peak in the first half of 2010.

Strip and neighborhood shopping centers have the highest vacancy rate among property types at 10.4%, but are finally starting to see a turnaround, with vacancies dropping some 11% year-over-year for the first time since 2009. Power centers posted the largest vacancy decline, falling 60 basis points year-over-year to 5.9%.

In Los Angeles, absorption dipped back into negative territory in the last few quarters. But JLL predicts positive drivers like population and personal income growth will help steer the market in the right direction in coming quarters.

Retail vacancy rates rose 40 basis points, year-over-year but remained flat in the last quarter. Supply is also anemic, JLL notes, which should keep the vacancy rate down. Spaces left vacant by big box stores are getting snapped up by other retailers, including Walmart, which is looking for locations in downtown, JLL says.

Walmart is also opening a new Super Walmart Center in Redlands and “will continue to be aggressive,” says David Thomas, the VP of retail brokerage for JLL.

Thomas tells GlobeSt.com that the slight growth in overall L.A. retail rents, pegged by JLL at 0.8%, actually disguises more robust growth in certain areas. “If you take the entire LA County, you might only see less than one percent,” he says. “But on the West side and Beverly Hills, you do see strong demand. I think it just depends on which specific market you're talking about. That tepid number is a result of some of the markets further inland that have high vacancy rates and big box properties that need to be absorbed.”

Thomas allowed that the JLL report is both optimistic and pessimistic. “You see positive signs in the economy, but there are certain factors dampening the growth. The high business costs and high housing costs, and some corporate relocation out of the state, are slowing the state. So you do see positive signs, but you also have those other factors.”

As reported earlier by GlobeSt.com, there's been an increase in buyers looking for retail real estate across property types, according to JLL's Maloney.