Research

United States | Retail Outlook Q2 2022

Retail demand marches onward as openings outpace closures

September 08, 2022

Contributors:

Keisha Virtue

While inflation presented a major challenge for consumers, decreasing spending power and consumer confidence, retail fundamentals remain solid.

U.S. net absorption remained positive for the sixth straight quarter but dipped 12.2% to 18.9 million square feet. Over the last 12 months, net absorption hit another five-year high of 94.3 million square feet. Likewise, deals are being inked. A little more than 250 million square feet of retail space has been signed for in the last 12 months, and current estimates put the final Q2 2022 leasing number at 78 million square feet, which would be the highest since Q4 2017.
So far this year, U.S. retailers have announced approximately 4,432 store openings compared with only 1,954 closings. Year-to-date net openings totaled 2,478. Discount stores top the list of announced openings, with 1,910 new locations planned. Restaurants were second with a combined total of 838, and apparel stores were next in line with announced openings of 348.
Second-quarter visits to experiential tenants like movie theaters, eatertainmentvenues and fitness centers soared 39.4% from the same period in 2021.
The first half of the year proved to be an exceptionally strong period for the U.S. retail capital markets, with total transaction volume coming in just under $44.7 billion, including M&A transactions, an 81% increase year-over-year.

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