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New Tenant Types Invigorate Retail Sector

May 22, 2019

The retail sector is making massive strides as companies re-engineer their selling platforms in a digitally oriented environment. As a result, multi-tenant construction is rising in conjunction with developer confidence, while total retail development remains subdued.

This year, retail completions are expected to stay on par with 2018, still at just a quarter of the last cycle’s high. Investors will continue to benefit from restrained supply growth as multi-tenant availability falls to the mid-6% range. Digital brands transitioning from online into physical locations will keep pressure on the vacancy rate. Furthermore, empty big boxes being converted to other property types like office space or industrial distribution centers will squeeze vacancy. Multi-tenant rents will realign with their pre-recession peak this year as space demand climb

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