Fundamentals remained healthy for the Retail market at the end of Q3. Total vacancy ended at 4.3 percent, marking September as the 7th consecutive month where vacancy has remained below 5 percent. Overall vacancy is anticipated to stay tight through the remainder of the year, which will ultimately keep lease rates on the rise.
Overall asking rates are up $2.00 from this time last year, reaching $22.00 per square foot (NNN, annual). Class A asking rates are averaging $28.00 per square foot, up 6 percent from 2023. The cost of materials and labor remains a challenge for developers pushing new construction rates to record highs with many new projects listing spaces $35.00 to $45.00 per square foot.
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