Retail rents rose over the past year, but not much, according to the latest report from Reis, a company that analyzes the real estate market.
The report found that retail rents rose 0.7 percent over the past year, and 0.3 percent over the most recent quarter.
“The national vacancy rate remains far too elevated to be conducive to meaningful rent increases,” said a report from Reis senior economist Ryan Severino. “Landlords have no leverage over tenants to exact much, if any, rent increases, because current and prospective tenants have many other options for the space needs.”
New construction also remained at “near record-low levels” during the past year, Severino added. Vacancy rates improved slightly, down 10 basis points during the first quarter.
Severino concluded that the retail outlook for 2013 is “restrained,” due to the increase in taxes and sequestration-related layoffs, as well as slow growth in employment and income.
He predicted the market will continue to see “barbell?like performance from the retail market—where the high end that sells luxury items, and low end that sells necessities, perform relatively well, while the middle, which sells non?luxury discretionary items, continues to desperately search for its customer base.”