According to a recent CoStar report, the Raleigh retail market is seeing high demand and limited supply as a result of population growth and strong consumer spending. Net absorption over the past year has been around 190,000 SF, while move-outs have been lower than average. However, only -490,000 SF of new retail space has been delivered in the same time period. This has led to historic lows in vacancies and availabilities at 2.2% and 3.1%, respectively. The report states multiple tenant leasing agents have commented that the market’s absorption would be significantly higher if more space were available for tenants to move into. There is a particular lack of second-generation space, and first-generation space is challenging for tenants to move into due to expensive upfits and long construction schedules. Raleigh’s steady population growth supports the construction pipeline, which is currently the largest it has been in over a decade, with 1.9 million SF of retail space under construction.
