An analysis by CoStar said that while the “overall retail market was cold over the past year,” 10 standout markets did well. All but one were in the Sun Belt.
The Sun Belt metros benefited from strong population and employment growth, friendlier tax and business policies, and agreeable weather.
Product sales volumes aren’t the best gauge of the retail CRE market. From January and November 2024, not counting the usually busy December period, advanced retail trade sales grew 4.3% according to federal data. That wasn’t bad by any means. The period from January 2010 through December 2019 saw 48.3% growth, or about 4.8% per year. That does includes 2010 through 2014 with almost 5.2% annual growth as the economy was returning to normal, starting from a low baseline.
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Instead, CoStar looked at the percentage of inventory leased, availability rate, asking rent growth, year-over-year change in CRE sales volume, and total return. The average of the top 43 markets showed 1.6% of inventory leased, 4.6% of availability rate, 2.3% growth in asking rent, -6.5% year-over-year change in CRE sales volume, and 5.8% total return.
The top market was Phoenix, with 2.5% of inventory leased, 4.9% availability rate, asking rent growth of 7.0%, 6.0% year-over-year increase in sales volume, and 9.8% total return.
Next was Orlando, with 1.6% of inventory leased, 3.9% availability, 4.5% increase in asking rents, 7.0% change of sales volume, and 8.9% total return.
Las Vegas, number three, had 2.2% inventory leased, 5.3% availability, 4.7% asking rent growth, 5.4% year-over-year sales change, and 7.8% total return.
Atlanta had 1.4% inventory leased, 3.9% availability, 4.2% rent growth, 8.2% year-over-year increase in sales, and 9% in total returns.
Number five is Columbus, with 1.9% of leased inventory, 4.0% availability, 6.9% asking rent growth, but a -25.4% year-over-year. Even so, the region gained a 10.1% total return. What made it the one non-Sun Belt metro to make the list was Ohio State University’s growth and capital investments from such large tech companies as Intel, Amazon, and Meta.
Charlotte had 7.5% total return with 1.7% percentage of leased inventory, 3.5% availability, 4.4% asking growth rent, and 7.5% total return but with -12.5% year-over-year change in sales volume.
Nashville had a 6.9% total return with 1.6% inventory leased, 3.0% availability rate, and 2.9% asking rent growth, and 4.8% sales volume increase.
Austin — number 8 on the list with a -1.4%change in sales volume but 5.9% total return, 2.3% inventory leased, 4.1% availability, and 3.7% rent increase.
Fort Lauderdale had the highest year-over-year sales volume change, with 2.1% inventory leased, 4.4% availability rate, 1.4% asking rent growth, and 6.2% total return.
Tampa, on the other hand, had the largest drop in sales at -26.3% year-over-year change in sales volume, but 7.8% total return, 1.6% inventory leased, 3.4% availability rate, and 4.4% asking rent growth.
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