Even though asking rents for U.S. shopping centers in the second quarter of 2020 were 16% higher than five years ago, U.S. retail vacancy fell to 6.1%, the lowest level in at least 15 years, per the Wall Street Journal.
Bricks-and-mortar store owners have continued to emerge from the pandemic with surprising strength and posting some of their best numbers in years, and many are planning expansions as more Americans continue to shop in stores.
According to an analysis by Morgan Stanley, more stores opened than closed in the U.S. last year—the first time since 1995. Some analysts expect that trend to continue this year even as recession fears rise.
Over the past dozen years, construction of new retail has slowed significantly after many years of overbuilding. Instead, most developers are opting to renovate outdated properties rather than building new ones. Those that develop new projects have been more cautious, usually securing leases from tenants before breaking ground.