May 24, 201704:47 PMBlog
Retail building development slow
While projecting a strong year in 2016, the market report from Marcus & Millichap, commercial real estate brokers with an emphasis on retail space, acknowledges that new buildings are relatively few and far between in the region.
The late 2017-completion Olympic Town Center in Gig Harbor is one of just two cited by the M&M analysis.
Notwithstanding this assessment, Tacoma-Seattle did move past San Francisco to claim the top spot in National Retail Index ranking. L.A., Portland and Salt Lake City are also in the Top 10.
Despite vacancy rates dipping to their lowest level of recent years for retail space, retail construction activities remain quite light in this sector around Puget Sound region. Beyond big-box projects for Ikea (in south King County) or Costco, smaller freestanding retail spaces will make up the bulk of 2016’s growth.
Tacoma’s available retail space is noted at 5.2 percent vacant, with asking rents at $15.67 per sq. ft., the lowest in the Puget Sound region.
Tightening supply, however, will put some upward pressure on rents for the fourth straight year. This study found an average 5.7 percent increase in the average asking rents year-over-year in first quarter 2016.