Retail Investors Remain Focused on Primary Markets

The weak employment market, sluggish housing sector, and low consumer confidence hampered the retail sector’s recovery in 2011, and the year ahead is likely to be similar, according to Grubb & Ellis’ 2012 National Real Estate Forecast. Though small transactions moved at a steady clip, limited tenant demand plagued the sector, keeping vacancy rates stable (neighborhood and community centers) to slightly up (regional malls). With minimal construction in the pipeline, the sector may show signs of recovery later in the year if job growth picks up and consumer purchasing confidence improves.

The majority of investment activity is expected to remain in large primary markets in the months ahead. The Grubb & Ellis Investment Opportunity Monitor estimates the following markets will lead the sector in the next 12 months: Los Angeles, Washington, D.C., Boston, San Diego, Seattle, Portland, Ore., San Francisco, Houston, San Jose-Silicon Valley, Calif., and Austin, Texas.