Absorption bounces back
Q2 2018 net absorption returned to positive territory following a previous soft quarter. The retail market saw 39,484 sq. ft. of net absorption while occupancy rates remained flat. While a few large vacancies offset higher gains in net absorption, year-to-date net absorption is no longer negative.
Healthy market activity
The quarter registered 78 leasing transactions for a total of almost 500,000 sq. ft. of gross absorption. Average transaction size in Q2 2018 was 3,300 sq. ft. and the largest transaction was a 38,400 sq. ft. lease in the South submarket.
Optimism for retail environment
Total metro retail sales are forecasted to reach $11.3 billion in 2018, a 4.1% increase over 2017. Additionally, retail employment has seen modest growth adding 1,500 new jobs year-over-year in June 2018, a 3% increase.
Current space under construction in high demand
Of the nearly 1.2 million sq. ft. under construction at the end of the quarter, 87% will be delivered occupied. The majority of the space under construction is expected to deliver in late 2018 and early 2019. No new construction began in Q2 2018.