What Drove Retail Rent Growth in Q4 2023?

“The reports of my death are greatly exaggerated,” said Mark Twain in response to reading his own obituary.

If retail real estate could speak, it might say the same. The retail sector, much unloved and out-of-favor in recent years, was the best-performing core real estate sector in Q3 and Q4 of 2023, according to Altus Group.

What drove retail rent growth in Q4?

• Retail supply has declined dramatically over the last decade. Availability hit a record low in Q4, according to CBRE.
  
  
• Vacancy rates for retail commercial real estate continued to trend downward, as stores benefitted from strong consumer spending and wage growth.
  
  
• Open-air shopping centers, often anchored by a grocery store, continued to see strong demand from consumers.
  

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