U.S. Retail Construction Levels Remain Well Below Pre-Recession Levels
October 17, 2019 | Liz Wolf | National Real Estate Investor
With the continued barrage of retail bankruptcies, stores closures, repositionings and rightsizings of store fleets—and the fact that many experts say the U.S. is over-retailed—it probably comes as no surprise that retail construction levels remain well below pre-recession levels.
“Another factor is with some of these larger shopping centers, the development is focused more on building complementary property types,” notes Alexander Levy, a consultant at research firm CoStar Group Inc. “You might see a mall and they will add on apartments or offices or hotels nearby and then it becomes more of a mixed-use property. That’s been growing coming out of the recession.”
In some cases, mall renovations are surpassing new construction activity, Levy says.
Just under 80 million sq. ft. of new retail space is under construction nationally in 2019, according to CoStar data. That’s a big drop from the last market peak in the years from 2007 to 2009, when an average of 140 million sq. ft. of retail space annually was under construction.
