In 2019, retail completions are expected to remain on par with 2018, still at just a quarter of last cycle’s high, according to Marcus & Millichap’s 2019 Retail North American Investment Forecast report. Though developers’ confidence is rising, many of them still remain cautious after overbuilding in the last cycle. This year, half of completions will occur in 10 markets.
Omnichannel customer engagement is taking hold with more online retailers discovering the need for a physical presence as it can substantially impact sales. Because of this, many digital brands are rapidly expanding their brick-and-mortar footprints.
Multi-tenant vacancy will continue to fall this year, dropping to 5.6 percent while moving the overall retail rate down to 4.7 percent. Net store openings should far outnumber closures again in 2019, boosting demand and asking rents.