IRVINE, CA—Auction.com, LLC recently released its rankings of the retail sector's top buy and sell markets based on current and expected fundamentals. Fort Lauderdale, Florida, Miami, Austin, Texas, Los Angeles and San Jose, California, notched spots on Auction.com's list of top buy markets thanks to growing rents and low vacancy projections. Meanwhile, investors of retail properties in Baltimore, Pittsburgh, St. Louis, Detroit and Philadelphia might consider selling as vacancies and rents are expected to remain stagnant through at least 2019.
“The retail sector has been surprisingly robust, considering some of the headwinds it's facing, and continues to recover as rents rise and absorption drives vacancies to a new post-recession low,” said Auction.comexecutive vice president Rick Sharga. “Part of the reason for this is that retail construction has been scaled back significantly compared to pre-recession levels. But we're also seeing positive trends in major, coastal markets in California and Florida where resurgent housing markets and higher household incomes boost retail sales.”
Auction.com's latest Retail Market Outlook Report shows consistency in the retail sector across most nationwide markets, as local economies and spending habits continue pacing the retail environment. Retail fundamentals have continued their slow-but-steady recovery as vacancies reach a new post-recession low of 10.1%, which is an improvement of 30 basis points from one year ago and just 100 bps below the 2011 post recession peak. The strongest markets include Fort Lauderdale and Miami, where household income is high and vacancies are projected to plummet through 2019.
“The retail sector still has not seen absorption numbers come close to what they were pre-recession, as e-retail sales climb and affect retail space, creating less need for inventory,” said Auction.com chief economist Peter Muoio. “As e-retail expands, store footprints continue to shrink. While e-retail is helping drive absorption in distribution and fulfillment centers, it continues to be a drag on retail space and is contributing toward the trend of smaller store footprints with less space warranted for inventory. However, absorption continues to outpace supply, as it has in 14 of the past 15 quarters, and this is driving vacancy rates down.”

Instant Insights /

Retail Markets in Florida, California and Texas Showing Strength

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