The improving economy and strong employment numbers, particularly in markets where technology companies have been driving growth, are generating increased retail demand in several cities across the U.S., according to Marcus & Millichap’s 2018 Retail Investment Forecast.
Seattle-Tacoma maintained the top spot on Marcus & Millichap’s National Retail Index followed by San Francisco and Boston, which retained the second and third spots. The report notes these markets have seen robust job growth from tech companies that provide higher-paying jobs and attract more residents who in turn generate increased retail demand.
Restrained deliveries on new retail product has helped keep vacancy tight and rents high in many markets, including in markets like Dallas/Fort Worth, which placed 12th on the NRI, jumping seven places due to a “significant drop in deliveries and rising demand.”
The report stated that Denver (#11) and Atlanta (#22) each jumped six spots on the NRI because of strong employment and population growth, which are expected to bolster retail sales.
Metro markets in the Midwest that have seen slower job and population growth dominate the lower part of the NRI: Milwaukee (#42), Cleveland (#44), Kansas City (#45) and St. Louis (#46). New Haven-Fairfield County in Connecticut comes in at 43rd on the Index, which follows 46 markets in the U.S.
“This East Coast market declined two notches (on the Index), as a lack of new job opportunities hinders population growth and higher retail sales gains,” according to the report.